We are a nation of aspirant property owners. Given a free choice, 86% of the population would rather own than rent, according to the British Social Attitudes Study.
But with a chronic shortage of supply and many priced out of the market altogether, should we instead focus on renting? And can this ever be an acceptable alternative for people?
In 2018 we conducted a study into attitudes to renting for the blossoming ‘Built to Rent’ (BTR) sector – where new build housing is for rent-only, not to buy.
As part of this, we sought to understand whether BTR developers could hit the right emotional buttons to make renting a more attractive option than home ownership.
Using psychology
We approach opinion research from the point of view that in order to understand perception, we must first understand how the human mind makes decisions.
Psychological research that forms the basis of behavioural economics tells us we are not dispassionate, rational actors when making decisions. Our economic choices are influenced by subjective mental shortcuts, our own perception of our gains and losses, and the wider context and framing of those choices.
Crucially, we are generally loss averse when it comes to decision making; weighing losses about twice as much as gains. We tested attitudes to renting and homeownership through this lens.
What did this lens reveal?
Instead of simply asking whether people would prefer home ownership to renting (we know that already, they do), we probed the gains and losses associated with each tenure to gain a deeper insight.
We started by asking about the losses associated with home ownership – the otherwise most popular choice of tenure.
Data was collected online between 8th February 2018 and 15th February 2018 by Forefront Market Research.
Financial considerations led the list of worries, closely followed by the practicalities of maintenance. The responsibilities of home ownership, and all that entails, weighed heavily in this framing.
This might suggest that BTR developers could address some of these downsides in their product offering. An obvious one would be maintenance – the one clear upside of renting from a professional landlord is (theoretically at least) never having to worry about this.
This was borne out when we asked about the losses associated with not renting anymore.
Data was collected online between 8th February 2018 and 15th February 2018 by Forefront Market Research.
But in order to truly understand how BTR developers could make renting more attractive, we need to understand the gains associated with home ownership too.
Data was collected online between 8th February 2018 and 15th February 2018 by Forefront Market Research.
Here we see powerful emotional drivers. The concept of ‘home’ and everything associated with that is easily the deepest, most evolutionary of concepts.
Without getting too philosophical, it is surely one of the defining features of humanity – the need for something more than shelter, something that is uniquely ours, safe and secure. Something we prize more than anything, something we will defend with our lives.
These results show this very clearly. Security, ownership and status. A rental product is unlikely to ever truly replace this, emotionally. But could it edge a little closer?
Can a rental product ever compete?
There is clearly potential for a rental product that maintains many of the positive aspects of home ownership, but without the downsides.
For example, security was seen as a significant gain of home ownership. Yet BTR developers are increasingly offering longer, more secure tenancies. When we asked about this, there was support for such a move.
Data was collected online between 8th February 2018 and 15th February 2018 by Forefront Market Research.
There may be other things BTR developers can do to tap into the gains associated with home ownership.
For example, flexibility regarding decoration and cosmetic changes to a rented space could be linked to the values held by someone who wants ‘a real home you can make your own’. Tenancies more like those for commercial properties – where you can do what you like, as long as you return it to how it was when you leave – might work here.
And some of the premium features developers are offering could tap into the desire to ‘step up in life’. Many people, without realising it, are happy to move from new build rental properties to crumbling old Victorian houses. Could snazzier features tip the balance?
If you want to know what your market really thinks – drop us a line here.
