The generational divide has been a hot topic on everyone’s lips for several years. Whether we’re analysing spending habits of baby boomers or scrutinising the lifestyle choices of millennials, we’re constantly thinking about the many ways that those from different generations contribute to everyday life. Digitally savvy and hard-working, Generation Z represents those born between the mid-1990’s to late 2000’s. A large amount of those from this generation are just starting university, either in 2018 or in the last couple of years, but what does an influx of Generation Z students mean for the student property market?
Generation Z’s attitudes to work
When it comes to Generation Z and millennials, there’s a lot to compare. Born between the early 1980’s to the mid-1990’s, Millennials are the generation that have dominated the workforce in recent years. In terms of careers and professionalism, Millennials are typically known to favour fun and exciting careers over those that may be more lucrative, finding success in more creative environments and job roles.
Generation Z, on the other hand, are more motivated by the idea of financial security. Those in this generation prioritise starting their own businesses and landing a well-paying job. Generation Z grew up during the recession of 2008, making them a lot more focused on gaining a stable income, and reluctant to land in any debt.
This drive to launch a successful business or find a job with a high salary means that more young people will be embarking on university studies to achieve their long-term goals. According to UCAS’s end of cycle report, the largest ever amount of 18-year-olds in the UK secured a place in higher education in 2017, increasing by 1.1% since 2016. University courses which lead to high-paying careers such as medicine, business studies and engineering and technology received the highest numbers of enrollment in 2016/17.
Demand for purpose-built student accommodation
This surge in university enrollments means there’s a growing demand for student property in the UK, but do the latest trends in student housing have anything to do with this influx of Generation Z students?
In recent years, purpose-built student accommodation, or PBSA, has dominated student housing trends. Students today have more choice when it comes to the quality of their accommodation, which is a far cry away from the days of cramped university halls and student houses. Student housing trends in 2018 are much more focused on luxury, high-quality apartments that are fully furnished and conveniently located.
Generation Z characteristics are likely to drive the demand for more luxury purpose-built accommodation further over the next few years. Those born within this generation are highly technically savvy, having grown up in a world of technology and often surrounded by social media from a young age. This means that internet connectivity is an important factor for Generation Z students, making them much more likely to choose accommodation with super-fast Wi-Fi.
Privacy is a big deal for Generation Z. Research shows that those from this generation are more conscious of online privacy and more wary of who they share their personal information with online. Student accommodation such as our Hamilton Hub student properties in Birkenhead offer private apartments that are overseen by an experienced management company, with ‘secret’ communal gardens and located just a short train ride from Liverpool city centre. This type of student accommodation could appeal to the Generation Z student who wants to live in an area that’s secure and private, whilst still allowing the opportunity to socialise and enjoy the university experience.
But what exactly does the university experience mean for Generation Z? Amongst Generation Z trends that differ from those of past generations, changing attitudes towards alcohol and drug use are a big trait of our newest students. Unlike millennial or Generation X students, students from Generation Z may be less inclined to spend their university days partying and binge drinking, instead prioritising their studies and career goals. This is yet another reason that overly sociable shared housing and wild university hall parties may see a decline in Generation Z students that are interested in more private accommodation.
Should I rent to generation Z students?
So you’ve spent some time understanding Generation Z students by researching Generation z trends and what they mean for the student accommodation investment market — now it’s time to think about what it might be like to rent to a Generation Z student. According to Countrywise, Generation Z spent around £5.5 billion on rent in 2017. The sense of responsibility that those from Generation Z have towards money and finances, paired with more responsible attitudes overall, could make students from Generation Z the ideal tenant.
Student accommodation market research shows that now is the time to invest in student property, with ever-growing numbers of students in UK cities like Manchester and Liverpool, and an increase in overseas students. The student property market is expected to grow by 17% by the end of 2018, whilst the purpose-built student accommodation market is already worth £46 billion to the UK economy.
If you’re interested in getting involved with the student property market and you need some advice, contact us today and a member of the RW Invest team will be happy to help. For a better idea of the potential finances involved with property investment, take a look at our stamp duty calculator.