Where do millennials choose to live? And how will this affect the property market?
To see a clearer picture of where this generation chooses to live, work and play, CBRE conducted one of the most extensive and detailed global studies of millennials. Global Major Report – Live Work Play: Millennials Myths and Realities is one of the most extensive and detailed global studies of how and where the millennial generation chooses to live, work and play, with major implications for the future of real estate.
As one of the largest generations in history, millennials are reshaping the global economy and influencing the built environment along the way.
They are more connected, tech-savvy, educated and culturally diverse than any generation that’s come before them. Yet, at the same time, they face unique challenges.
As millennials enter their peak years, there is an opportunity for occupiers, investors and owners of real estate to better understand this generation and its strategic implications on real estate.
The research found a surprising 41% of millennials in the UK still live with their parents. Of those, some 49% intend to leave the family home within the next two years, but the majority are expecting to move into rented accommodation.
Lifestyle and socio-economic factors play a part, but it appears that the lack of affordability in the housing market, combined with tougher mortgage requirements, is significantly delaying millennials from moving out of the family home and purchasing their own property.
CBRE’s research indicates the private rented sector will have an increasingly important role in providing homes for the future.
According to external forecasts, the number of households in the private rented sector will grow by 33% by 2025. Developers and investors have already begun to respond to this by increasing the build-to-rent (BTR) markets in some of the UK’s most populated cities, with a rise in investment interest, in particular, from international institutions.
Although initiatives such as Help to Buy continue to encourage and support first-time buyers, the government has recently signalled a shift in policy away from a focus on home ownership for young people. Last September, the housing minister indicated that affordable rental homes may now be included in targets for starter homes.
Living standards and expectations in the private rented sector are rising, too.
With more millennials moving out of state-of-the-art student accommodation (a sector undergoing a major transformation), there is greater demand for high-quality, new-build homes, offering flexible and convenient living with social areas and on-site amenities.