Future Living Report 2022
Introduction
Welcome to the inaugural Vita Group Future Living Report. Over the last decade we’ve studied trends and customer behaviour to a level of detail which we like to think, no other developer or operator in our space has ever gone to – searching for living trends, getting fanatical about our customers, and ultimately trying to hone our products and brands in a way which responds to them, creating a home for them to thrive.
As this harvesting of data has grown – and our thirst to enrich our product offer increases – this exercise has become a seismic piece of work for the business to undertake and one we’re incredibly proud of.
Now, with a community of over 10,000 people living with us across different sectors of living, our opportunity to behold and learn from our customer behaviour has never been bigger as our buildings become a canvas for the way in which people live – these insights help us to discover micro trends to interrogate on a more significant scale.
The largest study of its type – the Vita Group Future Living Report has been compiled from extensive fieldwork with over 8,000 respondents spanning Gen Z to Baby Boomers looking at the way in which we live and – most importantly – the way we want to live. The study took place throughout August and September 2022 and was conducted by independent research company 3Gem on our behalf. We have combined their data with our own expertise developed over 10 years of housing over 40,000 people.
It comes at a time when ‘Living’ is one of the hottest topics around. Due to the pandemic, people questioned if their homes were right for them and as we came out of lockdown, people moved in their droves to find places which worked better for their desired lifestyle – a flight to quality and usability.
Brexit and the pandemic have all taken their toll on the UK economy, creating market uncertainty and interrupting supply chains. This has further been exacerbated by Russia’s war with Ukraine which has created a landscape of soaring inflation, and rapidly increasing interest rates, which combined are dampening the desire to move, but whilst it’s making us all more money conscious, consumer behaviour in the ‘living’ sector is evolving rapidly. People are seeking innovation, looking for new ways to maximise their homes to respond to the new way they live.
In this report we look at these emerging trends in more detail, deep-diving into a range of topics – from the post-pandemic impacts on the way we live such as the rise in hybrid working and pet ownership, to the cost-ofliving crisis, impact on utility prices and the challenges ahead for the industry in the face of a shortage of housing.
The Panel
Jack Rigby
Russell Hayes
Giles Beswick
David Ancell
Trevor Moore
James Rooke
Max Bielby
Allan Hemphill
Rob Parker
The pandemics lasting effects on the way we live
It’s undoubtable that the pandemic has rocked the way we live – and whilst for most, life has returned to normality, there are several subtle changes that people are living with every day.
As Britain emerged from the first lockdown, we saw a nation quick to move. Restless hours spent searching property platforms resulted in a rise in people moving home, also spurred on by the stamp duty holiday.
People questioned more than ever how they lived and worked. For many, remote working became a way of life, and as a result, employers gave way to hybrid working, providing more flexibility for their workforce. For some, this change in work meant they could live further away from where they work and as result, it was widely reported that significant numbers of people were choosing a more rural way of life.
Others however, searched for a home which responded to their new lifestyle – a flight to quality – a space for a home office or a place to work out. Many people also welcomed a new companion into the home with the BBC* reporting Brits purchasing 3.2M pets during lockdown with an estimated 17M pet owning homes.
It’s major events and changes in lifestyle like these which give birth to micro trends, especially as people settle into new homes, new routines and return to some of their familiar old behaviours. And it’s microtrends like these that we love to learn from, forming valuable insights to drive innovation across our different verticals.
Hybrid living, making homes work
During the pandemic, as many as 84 per cent of workers were working from home according to ONS data. This change out of necessity has forced many employers in a competitive jobs market to be more flexible for their workforce, offering hybrid working for their staff. ONS found that 42 per cent of workers were working from home in April 22, a rise of 12 per cent from April 21.
So, with two fifths of Brits now hybrid working, we wanted to understand how this had impacted their lives, their homes, and the way they live, especially given they’re spending so much more time at home.
To understand what volume of time this is, our fieldwork asked our hybrid workforce how many days a week they spent working from home. Just over a quarter (26 per cent) spent two days a week working from home, more than one in five (22 per cent) worked from home three days a week, followed by 19 per cent who worked from home one day a week, 17 per cent working from home five days a week and 13 per cent working from home four days a week. Just three per cent worked from home more than five days a week. This data is relatively consistent across different age groups, incomes, and localities. On average it worked out as people working from home 2.9 days per week.
For many, these days are defined by their employer with almost a third (31 per cent) saying hybrid working was allowed for a set number of days each week. Two fifths of those hybrid working felt their employer actively encouraged them to work from home. Just one in twenty (6 per cent) felt their employer had negative feelings towards working from home allowing it under extenuating circumstances or that it was frowned upon.
“Hybrid working is here to stay in one form or another, and with it, the demand on living spaces has amplified. Not only does the increased amount of time spent in the living environment augment its overall importance to us, but the diversity of uses now required of the living space to deliver as homes and offices, has ultimately made the consumer far more discerning in their choices. This has really driven a flight to quality.” – said Max Bielby
As a result of these 2.9 days at home each week, Brits have invested heavily into their homes to help create a better balance between professional life and home life and in some cases even moved home to achieve that harmony.
From the 1,000 hybrid workers we spoke to in our fieldwork, three fifths of people (60 per cent) had made some form of adaptations to their home to enable hybrid working with one in nine of those (11 per cent) having to make major alterations to their home. A further one in in eight (12 per cent) had plans to make alterations to their home soon. Just a quarter (27 per cent) of those people we spoke to hadn’t made adaptations to their home and had no plans to.
Our research revealed that home owning Brits spent on average £4,303.10 on adapting their current homes to create a better environment to work in. One in ten (10 per cent) who spent at least £5,000 on upgrades and unsurprisingly, it was in the capital where the highest spending took place with households shelling out £8,850 on average and driving up the national average which would otherwise be £3,550 London was removed from the equation. Higher earners (those earning over £50K+) spent £5,410 on average compared to those earning under £50K which spent on average £3,100.
This isn’t something only homeowners did either – on average those living in private rented accommodation spent £2714 on adapting their home for hybrid working, albeit considerably less than those who own their own property who on average spent £5,686 on adaptations.
Two fifths (44 per cent) of hybrid workers had converted existing rooms within the home to be an office or moved things around in a room to create more space for a desk. One in 12 hybrid workers had converted an outbuilding such as a summer house or a shed into a garden office. One in twenty (5 per cent) purchased an outbuilding to create a garden office. One in 33 converted their loft (3 per cent), one in twenty people converted their office and one in 25 (4 per cent) extended their home to create a home office.
One in ten people (10 per cent) said they had moved home in a bid to find a more functional home for their new hybrid working lifestyle and a further one in five (19 per cent) said they’re seriously thinking about moving home in order to find a more suitable home which works better for their hybrid work/home life.
Most likely to have moved were those living in a city centre with a fifth of people (20 per cent) having already moved to find a place to suit their needs and over one in four (29 per cent) seriously considering a move.
Throughout the generations, Gen Zs (18-24 year olds) were also likely to have moved or be seriously considering a move as a result of their hybrid working lifestyle, one in six (15 per cent) said they had moved and one in four were seriously considering a move (27 per cent).
When asked if they felt their home was the right size for their new work from home lifestyle, just over a third (38 per cent) their home was too small for them, with three fifths (60 per cent) feeling their home was fine.
Brits have a positive attitude towards their new hybrid working lifestyle three fifths (59 per cent) of hybrid workers really enjoyed being able to work from home and a quarter (27 per cent) work from home more. Just one in eight (12 per cent) would like to work from home less, and one in one hundred said that they felt forced to work from home and would prefer to be in the office.
Half of hybrid workers (51 per cent) craved better separation from their work – slightly more than a quarter of those (27 per cent) said it was really important to pack away work away at the end of the day and almost a quarter (24 per cent) craved better separation but didn’t currently have it. Over two fifths of hybrid workers (43 per cent), said they had good separation between work life and home life.
Hybrid workers also felt they were more productive when working from home – over two fifths (41 per cent) said they were a lot more productive when working from home, almost a third (32 per cent) felt they were a little more productive at home. One in six (16 per cent) – very honestly – said that they were more productive when working home during the pandemic, but now they have got used to hybrid working, they’re not as productive. One in ten (10 per cent) admitted to being less productive when working from home.
Of those who felt they were less productive, almost half (47 per cent) said there were too many distractions in the household and one in four (25 per cent) admitted to doing household chores whilst working from home.
People also felt working from home had affected the way live in other ways – one in six (17 per cent) said their house constantly feels like a mess. One in six (16 per cent) have to share their space working around other household members and one in eight (13 per cent) felt they had lost crucial space.
Our fieldwork also uncovered a host of other positives and negatives hybrid working was having on people – almost two fifths (39 per cent) felt they had more time to spend with friends and family, over a quarter (26 per cent) felt that hybrid working had positively affected their mental health. More than one in five (21 per cent) felt they were now working more hours as a result of hybrid working, and a quarter (25 per cent) felt they were more focussed on their work.
One in six (17 per cent) said they were feeling disconnected from their work colleagues or that they felt more isolated (16 per cent). Just one in eight (12 per cent) felt that working from home had not affected them personally in any way.
David Ancell, Chief Brand Officer for Vita Group said: “Creating environments where the hybrid workforce can thrive is going to be key to the success of many new developments, especially for those in city centres. Spaces which can be multifunctional and adapt from work to lifestyle will create compelling and exciting places to live. From super-fast broadband and breakout spaces where you can be productive, to quiet places to join a Teams call and career enhancing events – consumers are no longer just shopping for a place to live – but a place to work too, and developers who nail this, will be able to capitalise on increased demand.”
It's time to be more than pet friendly
Over the last couple of years, a consistent theme in search behaviour is ‘Pet Friendly’ in fact it topped Rightmove’s moves most used search term right up until last month when ‘bills included’ surpassed it in response to the cost-of-living crisis.
With more people owning pets and searching for pet friendly homes, we wanted to look at what could “pet friendly” mean – how could we make our BTR product more exciting for pet owners and what kind of services and amenities could we provide which would make our resident’s lives better?
Now, for us, it’s larger pets such as cats and dogs which we wanted to really get a better understanding of, as they historically have presented a bigger challenge for pet-owners looking to rent. and so we spoke to 1,000 cat and dog owners as part of our fieldwork to draw robust insights from.
Three in ten (30 per cent) of those people questioned acquired their pet during the pandemic. That figure rises significantly for the younger generation. Almost half of Gen Zs (those aged 18 – 24) got their pet during the pandemic (48 per cent) and over two fifths (44 per cent) of people aged 25 – 34 (millennials) got their pet during the pandemic. That figure once again increases based on location and property type, well over half of people living in apartments (57 per cent) and those living in the city centre (52 per cent) became a pet parent during lockdown.
In comparison, just one in eight retirees (12 per cent) acquired a pet during lockdown so this is clearly a change in lifestyle which affects younger people living in urban areas the most.
When we take this data set on through the relevant questions, the story really starts to get interesting, for example three quarters of people (74 per cent) living in a city centre had to change the way they work compared to before the pandemic in response to owning a pet. This was echoed by two thirds (62 per cent) of Gen Zs (18 – 24-year-olds and almost half (49 per cent) of millennials (25 – 34-year-olds).
People have had to move too, both in preparation for and in response to owning a pet, the national backdrop once again providing a contrasting backdrop compared to those younger people living in the city. Nationally, one in six (18 per cent) of people either had to move or moved in preparation of getting a pet. In city centres almost half (46 per cent) of people moved in preparation of or in response to getting a pet and that trend continues for those aged 18-24 with a third (32 per cent) moving home. Interestingly only one in eight tenants (12 per cent) admitted to flouting any pet bans their landlords may have.
Across the board, seven in ten (70 per cent) of those questioned living in private rented accommodation felt their landlord did not make it easy enough for them to own their dog or cat. Over half said they would choose to live somewhere which had services and amenities for their cats and dogs over and above somewhere which just advertised itself as pet friendly.
Russell Hayes, Director of Residential for Vita Group said: “Over the last five years we’ve seen more and more young people acquire dogs and cats, this trend has then been accelerated in response to the pandemic as people sought companionship and the opportunity for hybrid working made pet ownership easier. It’s clear that it’s now our responsibility as operators to do more to engage with this active market of pet lovers and be more inclusive of pets and refine what we do. Vita Living has always been pet friendly. For us, this has meant not being discriminatory to those with four legged friends, there’s no increase in rent or changes to deposits and no expectation of “jumping through hoops” at the paperwork stage. We’ve also created a pet friendly environment with water bowls in reception, along with treats and pet owner events, but that said, there’s an opportunity to get more creative and do more for our fury tenants including developing new services and amenities which really speak to this market.”
In order to shape what these services and amenities could be, we asked our pet owners to rank everything from pet stylists to smart pet feeding devices to find out what people really wanted. We’ve pooled data sets to create a mean average from the most relevant data so it’s as targeted and balanced as possible.
In response to these findings, David Ancell, Chief Brand Officer said:
“This is really exciting, as we continue to develop our operational platform and connect our residents both in the universe and the digital world, services such as pet grooming and connecting fellow dog owners to go on a walk together will be quickly implemented and we’re sure it’ll be hugely beneficial to our community, helping them to forge better friendships with neighbours and feel a deeper sense of belonging.”
Engaging the side hustlers, start-ups, and creators with more compelling homes
The pandemic gave birth to thousands of start-ups and people exploring what gains could be made from their hobbies. In many cases, entire industries which are delivered by a young work force such as retail, leisure and hospitality were ground to a halt as Britain tried to kerb the spread of the virus, and as a result, these young people had more time to explore their passions and find ways to support their reduced income.
Forbes reported on a Bank of America study which found 62 per cent of Gen Zs and 56 per cent of millennials started a side hustle during the pandemic. ONS data revealed that in the UK alone, 400,000 new businesses were started in 2020.
With so many young people starting new projects in their spare time and trying to get businesses off the ground and a cost-of-living crisis set to fuel more people to look for secondary income streams, we wanted to understand what they really need from their home to help turn their passions into a reality and what demand there is for a blended co-work and living product.
Within the fieldwork we spoke to a range of different business owners, over 1,000 in total – seven-in-ten classed themselves as business owners of which over two fifths (43 per cent) said their business is their sole source of income and a quarter who do it part-time (26 per cent), more than three in ten (31 per cent) have a hobby which they use to generate income.
Women (37 per cent) and those under 34 (36 per cent) were most likely to have a hobby which they were using to generate an income compared to slightly over a quarter (26 per cent) of those aged over 35.
Over half of people (54 per cent) we spoke to had moved into their home before starting their business or hobby income, almost a third (29 per cent) moved into their home after setting up shop. One in 14 (7 per cent) were in process of moving to a home which was more suited to their business and one in ten (10 per cent) was currently considering a move to somewhere more suited to their business.
Over three quarters of people (78 per cent) said they would move home to a property if it had easy access to services and amenities to support the growth of their business or hobby income. This included nearly a third (31 per cent) who said it’s something they’ve been actively looking for and are happy to spend more money on it, the same amount (31 per cent) who would be happy to move to a home which supported their business and would be happy to spend a little more money for the additional services and amenities and one in six who said they’d move provided they weren’t paying too much money for the extra services.
These figures changed for those aged 18-24 who were the most likely to be looking for a home which had amenities and services to support the growth of their business, with over two fifths (43 per cent) and happy spending more money on it. And almost two fifths (37 per cent) who would be happy to move to a home which supported their business and would spend a little more money on it. This trend is echoed right the way up to those aged 44, with people over 45 less likely to make a move than those in the younger age groups we spoke to, demonstrating there’s clear appetite from both millennials and Gen Zs for a purpose built co-live and co-workspace which would support the growth of their business.
Perhaps unsurprisingly, the different amenities business owners wanted was split fairly evenly but favourites included recording / podcast studios, co-working desks, meeting rooms, design and photography studios, workshops and scalable storage solutions. Retail space and space to operate hair and beauty businesses also appeared highly, especially in verbal responses.
“During and following the pandemic, we’ve seen a real change in the way in which people use our buildings. Our private dining rooms were predominately used for entertaining friends and family, but now they’re occupied throughout the day for business use. Residents will welcome potential clients into the building and conduct meetings, they may host ‘in-person’ team get togethers and in some cases, they’re booking them out to make and create products. In the evenings, they’ve even been used as a place to host launch parties for their businesses, it’s really exciting to see how these spaces can help residents get started in business – either part time around their normal job or provide a platform for growth without them having to take expensive office space.
As we start to develop and hone this proposition, there’s a real opportunity to create a multi-purpose live and work brand which enables these hobbyist and part-time entrepreneurs to thrive and grow their business, in control of their destiny.”
Russell Hayes
Director of Residential
Vita Group
As well as amenity space, our entrepreneurs were also interested in a mentoring and events programme which would them up skill in areas which would support the growth of their business. Slightly more than two fifths (43 per cent) of the people we spoke to said they would choose to live somewhere if it hosted different events which would support the growth of their business. Of those, marketing came out top of the list of things our entrepreneurs wanted to learn about closely followed by advertising, design and finance.
Almost half of the people we spoke to (48 per cent) said they’d like to live in a community of like-minded entrepreneurs to help grow their business, with over half (54 per cent) saying they would actively engage with the community to share ideas, network and advance their business.
David Ancell continued: “There’s a real opportunity here to create something incredibly compelling for a generation that wants to be in control of its own destiny, giving residents the opportunity to thrive in business and taking away some of the expensive costs that all start-ups have at inception. Photography and recording studios, workshops and meeting rooms are all heavy investments – but designed as bookable multi-use spaces, it could mean that residents don’t have to make the significant capital investments required to get their ideas off the ground, sharing costs with multiple benefactors over a long period of time. In having a shared objective, this community of like-minded individuals have a real opportunity to make a success of their business and if we could help enable the next Patagonia or Lush and be part of their inception story – wouldn’t that be special?”
Challenges ahead as Britain responds to inflation
As this is written, based over a 90-day period, items on the media coined ‘cost-of-living crisis’ are published on average 23,000 times per day or once every four seconds, it’s a trend which has risen by 21% over the previous 90 days and for the most part, came as a response to soaring fuel and food costs following Putin’s invasion of Ukraine, but also as a result of post-pandemic supply chain issues.
So, it should come as no surprise that consumer trends in response to inflation and the media’s constant coverage of ‘the cost-of-living crisis’ are having their impact on the way we intend to live and spend our money.
After a buoyant couple of years for the housing market, rising inflation is now leading to sharp rises in interest rates which will cause the market to slow.
With the news a recession is looming, one in five (20 per cent) respondents said they have put plans to move on hold and one in eight (12 per cent) said that rises in interest rates means moving home is no longer viable for them. One in ten (10 per cent) said that they would continue to move home, but with increased caution and one in ten said they would move regardless of what happens with inflation and interest rates.
It’s against a backdrop, where almost half of people (48 per cent) weren’t considering moving home, regardless of what’s happening with the economy. It means that almost a third of people who previously could have been moving home, have had their appetite to move dampened by the economic downturn.
There are some small nuances when you start to drill down into the data, which provide opportunities for targeted marketing and others which show a gloomy year ahead. For example, for those who have lived in their home for less than a year, the picture is a little different, as they’re more likely to still be considering moving home, 12 per cent lower than the national average, just over a third of these people (36 per cent) had no plans to move, regardless of what was going on with the economy. It’s those with a mortgage who have the biggest concerns. Just one in twenty with a mortgage are willing to move regardless of what happens with the economy (5 per cent). They were also the most likely to be priced out of a move due to rises in interest rates (17 per cent) and to have put their plans to move on hold (23 per cent).
As a result, nationally, 80 per cent of people are likely to be staying where they’re, with just one in five (20 per cent) still interested in finding a new place to live. For those in the private rental market, three quarters (74 per cent) are likely to not move home with just over a quarter (26 per cent) still in market. Just one in six (17 per cent) of those people with a mortgage will move, nine per cent less than those currently renting.
“The market is undoubtedly going to be tested over the next 12 months as we enter another stage of the economic cycle. Fundamentally people will be wary of buying property due to increased mortgage rates and the risk of recession in which jobs and house values could come under pressure. This could increase the number of those looking for rental accommodation in the medium term until the outlook is more certain. At the same time, the same pressures will impact the supply of rental accommodation as private landlords sell and developers struggle to finance new schemes. The result is a perfect storm of demand and supply imbalance which will put upward pressure on rental accommodation”
Max Bielby
Chief Operating Officer
Vita Group
A nation of uber energy aware consumers: how feeling the pinch is helping us to adopt greener behaviours
It perhaps comes as no surprise that as Britain starts to feel the pinch, people start to question how they’re spending their money and what’s most important. As a result, people have become uber aware of their energy consumption and are adopting greener behaviours in a bid to keep down spending.
Over the last six months, only 16 per cent of people, said they weren’t considering making any changes to their home and the way they live to help deal with rising energy costs. In fact, two fifths (41 per cent) of Brits had already made changes to their home in preparation for rising energy costs. A further fifth (21 per cent) were currently saving to make changes to their property and it’s the same for those currently considering making changes with 22 per cent considering making improvements to help tackle rising bills.
When you group Millennials and Gen Z together and compare them to Baby Boomers (*defined for this data as those aged over 55), you can see there’s a seismic difference in behaviour. Three quarters of Gen Z (76 per cent) and Millennials (72 per cent) are far more likely to either have made changes to their home and the way they live or were saving to make improvements to their home to make it more energy efficient than Baby Boomers (57 per cent). In fact, a quarter (25 per cent) of those aged 65+ we questioned had no plans to make any changes. That compares to less than one in ten (9 per cent) of Millennials and Gen Zs, highlighting they’re more conscious.
Of those questioned who had made changes – just under two thirds (62 per cent) said their biggest change was their behaviour, being far more aware of their consumption, turning things off and trying to use less energy. This is backed up by a third (32 per cent) of those questioned having installed smart meters to get a better understanding of their usage. One in six people (18 per cent) had made improvements to reduce drafts around the home or installed a new boiler (17 per cent), one in seven had installed new windows (14 per cent) or had improved insulation (13 per cent). One in six Gen Zs (17 per cent) have moved to a more energy efficient home compared to a national backdrop of one in twenty (6 per cent). This provides BTR operators with high performing buildings a real opportunity to win over new residents from the private rental market and HMOs.
Vita Group, Chief Operating Officer, Max Bielby said: “While there is immediate term energy price volatility due to a changeable geopolitical landscape, which could change, the medium to long term outlook on rates suggests energy will still generally cost more than it did during the last 10 years. Forward looking rates are 2-3 times more than they were prior to the pandemic. As a much more significant outgoing, consumers and developers will be much more cognisant to this aspect of living. Whether that’s making improvements to current housing or evolving the specification of future stock, the landscape is definitely moving.
For consumers of rental accommodation, it was historically just the rent that determined affordability. Now the combination of the rent and utility bills is a very active consideration. An older apartment may attract a lower rent, but a significantly higher set of bills when compared to brand new accommodation. Furthermore, accommodation where bills are included or the operator acquires energy for the building to achieve more attractive bulk price, now are trumping rental options that don’t have any consideration to energy bills.”
The cost-of-living crisis will continue to impact the way we live far beyond energy usage as households try and balance the books
The F&B industry is likely to start to feel the squeeze as Brits start to cut back on their spending, almost half (48 per cent) said they would cut back what they spent on eating out in restaurants as a result of the rising inflation and the recession, 43 per cent said they would cut back on takeaways and almost a third (29 per cent) said they would spend less in coffee shops.
A third (32 per cent) said they were planning to cut back on what they spent on Christmas presents, and 29 per cent said they would hold off from upgrading their tech. Other ways thrifty Brits plan to cut down their expenditure included switching to own brand goods instead of leading brands (34 per cent), spending less on clothing (43 per cent), spending less on holidays (32 per cent), a quarter of those people (25 per cent) said they would cut back on TV subscriptions such as Netflix, Prime and Disney+.
One in seven (15 per cent) said they planned to get a second income to help support their lifestyle in the face of the cost-of-living crisis, rising to one in five (20 per cent) of those under 44. Almost four in ten (37 per cent) of people said they planned to save more to help navigate their way through uncertain times.
Giles Beswick, Chief Purpose Officer for Vita Group said: “We can clearly see that the cost-of-living crisis and rising energy bills is forcing people to react and change the way in which they live in some ways. It’s good to see that so many are making sustainability-driven decisions – cutting back their consumption generally, maintaining things they own rather than automatically replacing with new, and using peer-to-peer platforms and services to recycle and reuse more.
By finding ways to be more energy efficient, such as upgrading heating systems or improving insulation in their home and in some cases finding more suitable places to live longer-term, one hopes that some of these new behaviours are adopted as best practices – and people make much more conscious decisions about these things in future.
What we’re seeing is that people are more inclined to find new and ingenious ways to reduce their consumption and discretionary spending, rather than cutting back on the things that are important to them, such as shopping locally and supporting independent traders. Also, the gig economy is providing new opportunities for people to monetise their expertise and interests, rather than having to follow conventional careers paths or take up second jobs just to sustain their lifestyle preferences.”
Shopping for greener homes
Are greener behaviours mostly a reaction to circumstance? Are consumers thinking about how buildings perform, or are we focused on location and kitchens?
We’ve seen that Gen Z are switched on to the benefits of moving to an energy efficient home in order to help reduce the impact of the cost-of-living crisis, but we also wanted to get a better understanding of how important finding an energy efficient property was to people.
The property industry has made real commitments to ESG and developers are pushing innovation to create high performing buildings which have a low operational impact on the world. But is finding an eco-home top of people’s agenda when searching for a new home? No. Not yet at least. Energy efficiency ranked third least important property attribute (7.7 mean), above driveways (6.3) and garages (5.3). Top of the list in people’s property particulars was no damp, the location the property was in and its general repair. Kitchens, bedrooms and bathrooms all ranked higher than energy efficiency as you can see from our table below.
It will be interesting to see how this question changes over the next five years as new legislation comes into place to bring older housing stock up to date, especially for the private rental market which will be challenged with bringing property EPC ratings up from E to C by 2025. We predict that many private landlords will start to sell parts of their portfolio due to the challenges and costs associated with upgrading their stock to meet EPC C, especially for older buildings which are difficult to retro fit. Whilst energy efficiency might not feature at the top of people’s buying list yet – it’s a different story when it comes to home improvements people plan to make and ties into the data we’ve evidenced above in relation to the impact the cost-of-living crisis is having on people and their desires to bring down costs of energy bills through improving the home.
Improving the homes energy efficiency ranked fourth highest on people’s property to-do list. Removal of damp and damp proofing came out on top of people’s future home improvement priorities, this was followed by general decoration (e.g. painting and wallpapering) and building maintenance (e.g. pointing, replacing gutters etc). Perhaps surprisingly improving the building’s energy efficiency came above installing new bathrooms and kitchens or extending the property.
Allan Hemphill, Chief Development Officer at Vita Group said: “For me, this indicates a big change in people’s priorities, where previously homeowners have been making expensive improvements to their properties to increase the value of the asset or increase square footage in order to live a happier lifestyle, they’re now choosing to make upgrades which will improve the health of their property short and long-term to bring down operational costs. With the price of borrowing increasing and people feeling the pinch of the cost-of-living crisis, it makes sense that major projects such as extensions give way to those improvements which can reduce outgoing over time.”
Homeowners are spending on average £2,824 per annum on the upkeep of their property whilst renters are paying just £1,047 per annum.
Landlords must demonstrate value for money to their tenants
With people’s disposable income set to be tested as a result of the cost-of-living crisis, the Vita Group Future Living Report, also wanted to understand whether people felt their home represented good value for money and what percentage of their income is spent on their rent or mortgage.
Across the nation, Brits currently spend a third of their monthly income on their rent or mortgage (31 per cent). People with a mortgage on average are spending two fifths of their income on their mortgage (39 per cent), that percentage increases slightly for those in build to rent accommodation spending on average 43 per cent of their income on rent. People in the city centres were prepared to pay a premium (39 per cent) compared to those living in the suburbs of a city (31 per cent), demonstrating how location can command bigger prices. Salary made little impact on what percentage of people’s salary was attributed to their rent or mortgage – tracking closely to national averages.
For the most part – people felt their home represented value for money with over half (51 per cent) of people saying the amount they paid each month was either very good value for money or quite good value for money. Only one in six people (17 per cent) said that the amount they spend each month on their home represented poor value for money with one in 25 of those saying it was very poor value for money.
Student accommodation, such as Vita Student fared incredibly well within the data with 100 per cent of those questioned saying that it represented very good value for money. No doubt it’s bills included proposition and wrap around amenities helping to drive this perception.
In private rented accommodation, just over a quarter of those asked (26 per cent) said that the amount they spent on rent was poor value for money and over a third (37 per cent) said that their rent represented good value for money.
Max Bielby Chief Operating Officer for Vita Group said: “Three quarters of people (74 per cent) suggest they don’t feel negatively about the amount they are currently spending on accommodation in a backdrop of significant price sensitivity, and active consideration to cost of living. For all the reasons highlighted in this report, consumers are very focused on spending the appropriate amount on their accommodation to achieve their desired lifestyle objectives. Whether that’s in recognition that its where they will spend most of their time, or to accommodate a hybrid working lifestyle, or pets, or to avoid rising energy costs or to be somewhere that can help their career, housing is the most highly prioritised and protected area of consumer spending.
Focusing on rental accommodation specifically its far more acute. 33% of people now do not prioritise owning a home, renters are prepared to spend 43% of their income on rent and 37% of those renting, think this represents good value for money.
This underlines why we are seeing significant rental growth in the market at the minute, as consumers are prioritising this area of their expenditure to get what they want and need. Brands have the opportunity to deliver more value for consumers by introducing better services, spaces and experience, and consumers have the propensity and desire to pay for this. The market does however need to be careful that with a lack of supply, consumers could end up being exploited by paying more for poor accommodation options, just because there isn’t enough.”
Brits feel the government is falling short when it comes to tackling the UK Housing Crisis
Demand for housing has never been higher, but is enough being done on a local and national level to create the homes Britain needs? We wanted to get under the skin of the types of housing people want – and see if there was enough provision locally.
Starting with ‘affordable housing’ – over half of Brits (54 per cent) said that there aren’t enough affordable homes with just one in five (20 per cent) who felt that there were. This sentiment continues, when asked if people felt the government was doing enough to support developers to build affordable homes – half of the nation disagreed (49 per cent), once again, just one in five (20 per cent) felt the government was doing enough to help developers providing affordable housing to buy or rent where they live. Sadly, more also needs to be done to make social housing an attractive proposition for those who’re looking for affordable housing. Two fifths of those people asked (40 per cent) felt there was a stigma attached to affordable housing – whether rented or purchased.
Encouraging older people to downsize from their family home and into more suitable property is often promoted as an attractive solution to the lack of large family homes, however when asked, two fifths of Brits (40 per cent) felt there weren’t enough suitable homes in their area for the aging population.
Purpose built student accommodation is also seen as a great way to ease pressures on local housing stock, reducing demand on student HMOs so they can be used for families. A third (29 per cent) of Brits felt that there wasn’t enough suitable student housing in their area, this figure changed for those who lived in a city centre and are perhaps experiencing the most pressures on housing demand during university term time rising to 45 per cent who felt there wasn’t enough suitable student accommodation.
“It’s widely reported that development isn’t keeping pace with the UK housing market’s requirements and Britain is really feeling it too. People are calling on local government to do more to support the provision of new homes, especially those which cater to a particular requirement such as students and the elderly – as we track this subject overtime and more new homes are delivered across the country, it will be interesting to see how public opinion changes and what nuances the data brings out in different regions and for different housing types.”
James Rooke
Head of Planning
Vita Group
Are city centres doing enough to attract and retain a broader spectrum of demographics?
For the most part – property and people’s habits in relation to where they live and when is predictable, it can be generalised. Young adults move to urban areas when they first leave the family home – either for education or work – most commonly living with friends.
As they hit their mid to late twenties, they meet a partner and start co-habiting with them, often still in the same city or town centre location. Now perhaps a little later than a couple of decades ago, these couples make a move out of their town or city centre to the suburbs.
The thirty-somethings’ race for space and moving back closer to relatives is in many cases a rite of passage – from here it’s starting a family, then it’s a move or two more as families target their ‘forever home’ – after this, things really settle down and people move far less, if at all.
This can be seen in our data too, two fifths (40 per cent) of 25 – 34 have a strong desire to move home in the next two years. This drops down to one in ten (11 per cent) of people aged 65+ and one in seven (15 per cent) of those aged 55-64. Those aged over 55 were also most likely to have no desire to move at all over the next two years. Over half of people aged 55-64 (54 per cent) had no desire to move, that increased to three fifths (62 per cent) of those people aged over 65.
We can also directly correlate people’s desire to move home within the next two years with people’s desire to start a new family. Nationally (across all ages) one in eight (13 per cent) have a desire to start a family in the next two years – marry that dataset with those who have a strong desire to move in the next two years and it jumps to a third (34 per cent).
This continues – a third (33 per cent) of those aged 18-24 are living with other adults who aren’t their family members or their partners, just over a quarter (28 per cent) live with their partner and just under a third live on their own (31 per cent).
By the 25-34 age category three fifths (59 per cent) are living with their partner, with just over one in five now living alone (18 per cent) and 17 per cent living with friends / flatmates. Those with young families (kids under 6) also jumps in the 25-34 age category from one in ten (11 per cent) to a quarter (26 per cent).
With people living longer and ‘a housing crisis’ with too few conventional family homes coming onto the market, we wanted to get under the skin of these habits in how people live and move (or don’t). As such we delved deeper into three datasets to try and understand how city centres (and their local authorities) and BTR developers can retain young families and how they can attract retirees and empty nesters back – as such we spoke to over a thousand people for each of these three categories to get robust insights into what could affect change, making our city centres more attractive.
Making a ‘play’ for empty nesters earlier - how the arts could help free up family homes
Britain’s aging population is widely publicised, according to the Common’s Library, it’s expected that by 2043, 24% of Britain’s population will be over 65, going from 12.3M people (19%) to 17.4M. At present, it accounts for 6.9 million households being led by someone over 65, of which 45% are single-person households with 3.1M adults over 65 living alone – a figure which will only go up as audience size does, the data uncovered that 55% of these households had at least two spare bedrooms.
But as we’ve already uncovered, as people age, they’re less likely to have any desire to move home, of the 1,000 empty nesters we spoke to, nine in ten (90 per cent) had no desire to move home in the next two years – much higher even than those sharing the home with their children.
So, how can we engage older demographics to give up their ‘forever homes’ earlier to reduce pressures on the housing market whilst Britain starts to build more suitable retirement homes.
Our fieldwork looking at empty nesters (those who no longer have dependants living in the family home including people aged 45 and over), found that eight in ten (82 per cent) were happy with where they lived, almost three quarters (73 per cent) said their home was the right size for their current needs and two thirds (67 per cent) said it was the right size for their future needs (next five years).
Just one in eight (12 per cent) felt their home was currently too big for their needs and one in seven (15 per cent) felt that their home would be too big for them in the next five years, this rose to one in five (20 per cent) of over 65s. As a result, ‘downsizing’ isn’t particularly high as a driving force for those under 65. In fact, of those with a strong desire to move home in the next two years, a quarter of them (28 per cent) felt their home was too small for their current needs.
As a result, BTR developers need to look for new opportunities to demonstrate the lifestyle benefits BTR can offer for people who no longer need a large family home. From supermarkets to takeaways, country walks to GP surgeries and everything in-between, we asked what our empty nesters what they felt they had easy access to and what was missing from their lives to see if there was anything which we could provide better access to in the hope of finding a driving force which could switch some onto moving.
For the most part – people felt they had good access to a wide array of amenities and services in their local area including public services such as healthcare and travel, with ‘good access to’ the amenity/service out balancing ‘would like better access to’ in most cases.
The real imbalance came from lack of access to arts and culture – museums, theatres, cinemas, galleries, exhibitions, and restaurants came top of the list people would like better access to that they don’t currently have easy access to.
We also asked our empty nesters – if they were to move, even though they may have no desire to, what type of area would they move to? A third (32 per cent) wanted a move to a semi-rural area, with the suburbs of a town selected by one in five (20 per cent) and rural area picked by 18 per cent. Town centres (8 per cent), City centres (6 per cent) and remote areas (6 per cent) all scored lower on the list of desirable places to move to despite better access to restaurants and the arts being craved.
“Whilst semi-rural life is certainly an aspiration – we can see that our empty nesters are craving some of the trappings of city life with theatres, cinemas, and restaurants out of easy reach. Whilst the market opportunity is likely to be quite small, there’s certainly an opportunity draw empty nesters out of their large family homes and into luxury build to rent apartments, providing an opportunity for them to enjoy city life more, especially those who’re yet to retire and could have more to gain such as reducing their commute time.”
David Ancell
Chief Brand Officer
Vita Group
Retirement living
As we’ve seen throughout the fieldwork, later living brands need
to have an array of key messages to attract retirees out of their beloved family homes and downsizing isn’t necessarily going to do it.
We spoke to over 1,000 retirees to get a better understanding of what’s on their agenda, what’s conducive to a happy retirement and what they want to get out of their later years. The core audience of this group was over 65s, however it did include a number of people who had retired early (18 per cent).
For well over half (57 per cent) of our retirees, the thing they were most excited about was being able to spend more time with their family.
This was closely followed by travelling more (53 per cent) and spending more time with friends (46 per cent). Spending more time doing more sports and hobbies was also key for over a quarter of those we spoke to (28 per cent).
Perhaps higher than expected – one in six (15 per cent) are excited about starting a home renovation project – showing how invested these over 65s are in their home.
Two thirds of the people we spoke to (67 per cent) said they had the financial stability to do everything they had planned during their retirement – one in five (19 per cent) were confident they had enough savings in place to do everything they wanted to and half (48 per cent) felt they’re in a comfortable position to do what they wanted to. Just one in twenty (6 per cent) said they intended to downsize their home in order to do things they wanted to during retirement and a quarter (27 per cent) said some of their retirement bucket list maybe on hold due to lack of funds.
When asked about their feelings towards selling their home to release equity – half (52 per cent) said they wouldn’t be happy to do so and won’t be doing it. Just under a third (30 per cent) would be happy to sell up to release equity either now or in the future.
Trevor Moore, CEO of Symphony Park said: “Life is still full of ambition throughout retirement, whether that’s seeing family more or taking on new travel adventures. It’s also clear that even as people head into their later years, they have aspirations for their homes and they’re heavily invested into them, emotionally, financially and physically, as such, it’s time to excite and empower the over 60s about future living opportunities which can support positive physical and mental wellbeing.”
When it came to growing old with their homes – over a quarter (28 per cent) hadn’t thought about whether their home would be suitable for their future requirements and if they’d be able to keep up with its upkeep or stay mobile. One in five (18 per cent) had planned adaptations for their homes to make it easier to manage and one in six (17 per cent) had already moved to a property which was more manageable. One in five (18 per cent) thought their house would be suitable for their future needs but hadn’t thought about how they’ll future proof it.
One in six (16 per cent) intended to downsize into a more manageable house – just three per cent of those people we spoke to intended to move to a retirement community with statistics aligning across all datasets.
David Ancell, Vita Group Chief Brand Officer said: “As a sector, Integrated Retirement Communities have relatively low market saturation in the UK and more needs to be done to educate consumers about this exciting new product – and how it can support the wellbeing of its residents. With other western markets really switched onto later living communities, especially in America and Australia, it’s clear developers need to do more to engage this market and win over the one in six who have plans to move into a smaller, more manageable homes as well as excite those who wish to stay in their existing homes.”
As we delved deeper into retirement communities – one in twenty (5 per cent) had considered moving to retirement community and felt it could be the perfect place for them. One in twelve (8 per cent) said moving into a retirement community was something they’d discussed with their partner and may consider it later in life.
Two fifths (42 per cent) said they didn’t want to move into a retirement community unless circumstances meant that they had to and the majority – 45 per cent said they would adapt their existing home to support their living needs over moving into a retirement community.
When probing further into whether retirement communities have a stigma which made them less attractive – over two fifths (44 per cent) said they didn’t feel there was any stigma attached to them, but they wouldn’t want to live in one. Over a quarter (27 per cent) said they didn’t feel there’s a stigma and they’d be happy living in one. One in ten (10 per cent) felt that living in retirement community aged you and one in five (19 per cent) felt that it sounded like a place people go to die.
“There’s clearly a big job to do here – retirement living in the US and Australia is an attractive and exciting proposition, however in the UK it’s still a relatively new market and people struggle to make the distinction between care homes and retirement communities. The sector needs to do more to showcase this innovative way of living which supports the wellbeing of its residents as they age.” Trevor Moore, Symphony Park CEO said.
How do we curb young families from nesting in the suburbs?
We know that city living is incredibly exciting for twenty-somethings as they enjoy close proximity to work, nightlife and friends – but as we’ve detailed, when these twenty-somethings settle down and start to think about a family, city life becomes less desirable. With less properties on the market due to the cost of living crisis and rising interest rates, first time buyers with families will find it increasingly difficult to buy. To get a more detailed understanding, we spoke to families with young children and those planning a family.
Half of the adults we spoke to who have a young family (child under 6) or wanted to start a family and had moved out of a city centre in the past five years had moved for a more rural life so they could raise a family. Three in ten (31 per cent) felt moving to the suburbs is the only option for people wanting to start a family and almost three-fifths (57 per cent) said that they’d prefer not to raise a family in the city as it’s not suitable.
Seven-in-ten (70 per cent) of those people we spoke to currently living in a city are likely to move to the suburbs or for a more rural area in order to start a family. And almost everyone (99 per cent) said they would be encouraged to move out of a city to the suburbs or more rural area in order to start a family, regardless of where they lived.
Concerns regarding the safety of the environment (52 per cent), lack of green space (51 per cent) and pollution (49 per cent), were the top three driving factors for people moving out of the city to start a family. Better schools, the chance of ownership and being closer to family all scoring highly.
Access to better schools in the city centre would encourage more young families to stay in the city said almost half of respondents (47 per cent) along with better inner-city nurseries sighted by over a third (36 per cent).
Almost a third (31 per cent) of those who moved out of the city to start a family, said they miss the liveliness of city life.
Russell Hayes, Director of Residential for Vita Group said: “We’ve already started to see a rise in the numbers of young families living with us, and whilst moving to the suburbs to start a family has been a rite of passage – as rising interest rates and inflation make it harder for young families to get onto the housing market, we expect to see more couples living with us become parents and raise their children in our buildings.”
David Ancell, Chief Brand Officer for Vita Group said: “As the inner-city population of young children and parents increases – the need to create spaces which work for young families will undoubtedly grow too and it’s something we’re already starting to see within our buildings. As a result, creating amenity spaces and services which respond to young families will become ever more important, from easy to access nurseries, to multi-functional spaces such as private dining rooms which are also as playrooms for children under five to use before 7pm. As this micro trend grows, our need to reflect it in our proposition will too.”
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