When you are thinking about starting a business, the No. 1 consideration should be that you enter into an industry that has longevity and sustainability.
This is one of the key benefits of being involved in the U.K. residential property market! There is massive and increasing demand for housing and it's fair to say that having a roof over your head is never going to go out of fashion.
But those are just broad statements. When you dig down on the detail, it's obvious that a property business has all the hallmarks of an "eternal" one.
In the U.K., there are three main types of residential housing tenure:
2. Private rented sector
3. Social housing
Data from the Office of National Statistics (ONS) shows that there has been a steady decline in owner/occupation from a peak of 71% in 2003 to 64% in 2015.
The latest figures from the 2015 English Housing Survey show that the private rented sector has increased and now accommodates more people than social housing for the first time. 19% of people are now housed in the PRS, compared to 17% in the social sector.
With money harder to borrow, larger deposits required, a decline in affordable and social housing, and the impact of the economic down-turn, the U.K. has seen a strong growth in the importance of renting and this is predicted to continue because of a number of factors.
1. Increasing population
A combination of the birth rate reaching a 41-year high and the struggles faced by the contruction industry have caused the ratio of births to new builds to reach its highest level since the end of the second World War!
Mortgage insurer Genworth said last year that 6.1 children had been born in England for every property that had been built in the past 4 years. This is more than double the ratio of 2.9 seen in the 1950s and 2.4 seen in the 70's.
Eurostat predicts that the U.K.'s population will continue to rise, from 65 million in 2015 to 67m in 2020.
Remember, we are a small island and land is increasingly at a premium.
2. People living longer
Scientists believe that due to improved diets, advances in medicine and health care, that one in three babies born will now live to be 100.
The total number of centenarians is predicted by the ONS to rise from 14K in 2013, to 111K in 2037.
This means properties will be occupied for longer timespans, and not returned to the housing stock as quickly as before.
3. Renting now a lifestyle choice
According to a recent economist report in the Independent, 50% of 20 to 39 year olds in the U.K. will be renting in the private sector by 2025. This is increasingly down to a lifestyle choice, but also because, with house prices rising, many young people cannot afford to get onto the property ladder.
All these statistics suggest that lettings agents are not going to be short of customers!
Successive Goverments have failed to tackle the housing crisis and there continues to be a lack of a coherent strategy.
Social house building is massively in decline, new build targets are not being met, homelessness is on the rise, the number of families in temporary accommodation is at a 12 year high, and council house waiting lists are getting longer and longer.
The private rented sector is playing a huge role in housing the nation and will continue to do so.
The other positive benefit about being in the property sector is that there are actually two sides of the business.
Belvoir is expanding rapidly into the Sales arena and many of our franchisees are offering both lettings and sales.
“The fact that over 50% of the network is now able to offer sales is an important milestone for Belvoir and serves to strengthen our network as well as putting franchise owners in a strong position to respond to changing markets,” says Dorian Gonsalves, Belvoir’s Managing Director.
Offering both sales and lettings gives an additional level of comfort because if house prices decline, then less people rent because they can afford to buy.
However, if house prices rise, then more people rent.
So, either way, a property business can flourish in any market conditions as our new Head of Franchise, Rob Macejewski, explains in this short video:
If you're interested to discover more, get in touch or come and meet us in 2016 to discuss your way forwards.
You can also find out out more by downloading the Times report, "The Future of Franchising" which was published in March and which features Belvoir.
Belvoir is an award-winning estate and lettings agency with over 200 successful offices around the U.K. If you would like to talk about being our next success story, please call us on 01476 570000 or email us on firstname.lastname@example.org