Sandra Jones Dataloft MD presented Generation Share
UKAA Roundtable, 3 December 2019
The Union Club, Greek Street, London.
Generation Share:
Getting to know London’s sharer market.
Almost one third of new leases in London are taken by groups of sharers. In some parts of the city, it is as high as 40%. With around 300,000 sharer households and some 150,000 new sharer tenancies signed in any given year, sharers are undoubtedly a major force in the rental market and a demographic that any provider of homes for rent should get to know.
At a UKAA roundtable on December 3rd, held in the bohemian surroundings of the Union Club on Greek Street in Soho, Dataloft presented the findings from ‘Generation Share’ – a research study of London’s sharer market and Say Property Consulting reflected on the implications for the design and management of properties let to sharers. The research, which called into question some commonly-held beliefs about sharers, was commissioned by Lyvly who have created an operational platform re-imagining the concept of flat-sharing, addressing challenges for renters and landlords and creating a community of engaged members.
A quick straw poll showed that the majority of the audience had, at some point in their lives, been sharers. Their experiences had been good and bad. Generally, they involved some form of compromise – often sacrificing quality for location. Sharing a home has long been a popular lifestyle choice in London but it remains a poorly understood market with many sharers in sub-optimal accommodation. When it works well, it’s a sociable, cost-effective and rewarding lifestyle choice but, as highlighted by Say, poor design and operational inefficiencies often make the sharer experience less successful.
The high cost of rent in London has changed attitudes towards sharing for a generation who have, in any case, embraced the sharing economy, enabled by technology and peer to peer networks and who grew up watching ‘Friends’. At the same time, HMO licencing is reducing the supply of traditional sharer properties.
The research showed that people choosing to share homes in today’s global city no longer fit the stereotypes of the past. It is not safe to assume that decisions are driven purely by cost, nor that sharing is a short-term inconvenience. Sharing, collaborating and connecting are central to the sharing economy and with that come expectations of ‘on-demand’ standards of service.
The research study drew on evidence from DRMA, Dataloft’s vast databank of rents paid and tenant profiles. It showed that sharer households are more concentrated in Inner London, with particularly high proportions in Lambeth, Wandsworth, Southwark, Hackney and Islington, begging the question, what do providers need to do to tempt to zones 3, 4 and beyond? It also showed that sharers are relatively footloose and mobile, compared to other renters, with 53% moving more than 2 miles as the crow flies from their previous address – which gets you a long way in London.
Perhaps most surprising was the analysis of sharer income levels. 52% of sharers in the DRMA dataset earn over £30,000 pa, 29% earn over £40,000 and 18% over £50,000 pa. That analysis is based on line by line data for 83,000 tenancies. These are people with choices about where they live. And, although the average proportion of income spent on rent was 30%, for those earning over £30,000 pa, the proportion declined progressively. These earning figures were corroborated by analysis of the Lyvly member community.
What could persuade these footloose, high earning young people to commit more of their income to rent, or how might it translate into amenities or inclusive costs? The team left their audience with these and other important issues to consider when defining target markets and formulating their investment strategy – the summary report and slide-decks are all available on request from the team.
Sandra Jones listens attentively while her colleague, Julia Middleton, talks through the numbers. The study covered what sharers earn, what they pay in rent, (based on actual incomes and share of achieved rent) and analysed distributions across London by age, journey to work, migration flows rent per room and affordability by household and renter.
Chris Martin of Lyvly looks on as, David Tomlinson and Debra Yudolph of Say are poised to address what the findings on London’s sharers mean for operators of rental property, drawing out implications for building design and furnishing, management service levels and investment valuation.
