Escaping the capital

Recently, Rightmove reported they had seen a sharp increase in Londoners looking outside the city for new homes – and this reflects an ongoing trend, with the numbers of people leaving London increasing by a third between 2012 and 2018. This domestic migration is driven mainly by young families squeezed out of the capital by costs.

One of the few silver linings of COVID-19 has seen a shift in professional expectations, with employers and employees becoming more flexible working out of the office. And with it, the opportunity to move further afield has increased, helping to see an upturn in Londoners looking to East Anglia to find a better work-life balance as the ‘magic hour’ commuting distance has extended, bringing Norwich and Cambridge into focus as viable alternatives.

Who’s entered the market?

Studies have shown that those leaving London are in their early 30s, while the average age of a first-time buyer in the UK has increased by six years, to 34 years old, since 2007. All the evidence suggests we’re now welcoming millennials to the housing market. But who exactly are millennials?

Estimates vary slightly but the general consensus is that those born between 1981–1996 are considered millennials – a group whose spending habits we’ve fondly studied over the last decade or so. Perhaps the biggest shift has been to reassess how we communicate to this generation and instead communicate with them – putting them in the driving seat.

Nothing new, right? It’s now such old hat that since these avocado-eating phone tappers graced the earth with their environmental conscience we have seen the advent of the tech-fluent Gen Z and the emergence of Gen Alpha, the new kids on the block.

So why are we still focussing on a generation that has been so vastly overstudied?

Better late than never

Well, put simply, because millennials are embarking on what will be their biggest purchase yet, and lots of businesses will want a piece of the pie. Compared to generations before, millennials are late bloomers when it comes to buying their first homes, with just 38% of 25 to 34-year-olds being homeowners, down from 55% a decade earlier.

Of course, this is largely no fault of their own, owing partly to rising house prices, increasing living costs, lagging wages, student loan debt, living through two major economic crises (2008 and now) and the credit card bills that follow. But this hasn’t stopped them joining the party, if fashionably late – of all generations in the US, millennials now hold the lion’s share of the new housing market, at 36%, and were predicted to increase that to almost 50% before COVID struck. And the trends are similar in the UK.

With this new market, we should see new marketing – we already claim to know what makes them tick. Yet, despite this, we haven’t seen a marked shift in the way homes are sold to this new generation of buyers. But why does it matter? There are lots of buyers, and there’s a shortage of homes. High demand, low supply – a seller’s dream. So why waste money on marketing?

Because there are threats around the corner for this buoyant sector. Current homeowners are set to overtake first-time buyers as the market driver in 2021, with the young being most impacted by COVID. And, as of April 1, only first-time buyers will qualify for the final two years of the government’s Help-to-Buy scheme, which could see the housing landscape change and become much more competitive. Even if these threats didn’t exist, those in the sector should be looking at how they can carve out a greater share of the market by improving how they engage this new group of buyers.

A new dawn, a new day

Before millennials, home buyers walked down the high street and into an estate agent’s or saw a banner outside a new-build estate and visited the marketing suite. But this group has overseen one of the biggest shifts in human communication since the printing press was built. So surely a shift of similar gravity is needed to keep the conversation relevant?

But in most instances, the marketing techniques and channels used by the industry remain much the same, targeted at an older generation that would have lapped up the glossy images in a promotional magazine of a man, woman and a dog, smiling and holding the keys to their new shiny house. But we know this isn’t how millennials do things, or necessarily what they value, so we need to change how we sell.

Tech please, but community counts

It should be no surprise that 81% of older millennials in the US found their home through an app – we know this generation is immersed in technology. COVID has dragged some of the sector’s digital dinosaurs into the 21st century and beyond by accelerating their reliance on online sales and leads.

The first steps in the process of finding a home can now almost exclusively be done online. And when giants like Amazon have banked on this increasing by creating TurnKey, an online forum to take potential buyers step-by-step through the buying process – from which also offers Amazon credit for successful purchases, you know it’s only heading in one direction. In addition, estate agents like Redfin, are working to allow potential buyers to bid directly on properties through their websites. So we might not be so far from the whole process being digitalised.

But, at the moment, we can’t ignore that there’s still an irreplaceable role for in-person contact once interest in a property has been piqued, perhaps there’s just a shift needed on generating leads in the first place.

A sense of place, not just a place

Contemporary estate agent’s like London’s The Modern House incorporate poetic descriptions of property alongside more detailed images and descriptions of the local area, as well as the property itself. All of this is framed in a beautifully designed and functional website, with lifestyle shop included, that could hold its own in an art gallery. Why? Because this new generation of buyers are as much interested in lifestyle and experiences to be had in and around their new home as the bricks and mortar itself. And that extends to the estate agents they use.

Most millennials prefer urban living within a walkable distance and close proximity to experiences and amenities such as food outlets, drinks, music and entertainment activities rather than high streets, which they find online. And this can be seen in the unfortunate downward trend in British retail, even before COVID. Property developers and promoters should think what ‘local event’ rather than which ‘nice worktop’.

Out with the gloss, in with the chalk-based eco paint

And communicating to this group will need to see a significant shift away from the glossy brochures of older generations. Consumer brands across all sectors are having to adapt how they promote their products to millennials. The gloss of old is often viewed as a stamp of extravagance, excess and elitism, sometimes with negative associations to worker welfare, environmental impacts and social inequality.

Millennials are looking for something more bespoke, something they can feel proud of that represents their values, proud of enough to share and document on their social channels (likely Instagram). 89% of millennial consumers will consider paying more for ethical and sustainable brands. So businesses that shout about their ethical credentials could have the key to a sale. But it’s important to show, not tell.

Because for millennials, authenticity is key. And this is borne out of suspicion. Millennial audiences have deep cynicism for advertising and marketing communication, but relate to social media influencers on a much more personal level. 88% of millennials say authenticity is the key reason they follow an influencer, and 50% of millennials trust them to give genuine product recommendations.

So, acting with transparency about business practices, introducing genuine people involved in the process and ensuring it’s not over-produced will encourage greater market penetration. For example, rather than saying the product is good quality and sustainable, show someone how it is. Show someone building it, and where the material came from – and make sure it’s not scripted. The passion of an employee or someone in the supply chain is invaluable.

Interiors, houses, renovations, lifestyle and family are huge content tropes across social media, giving us a vast range of opportunities to create content – and desire.

Make it personal

And once you have them interested, establish trust and loyalty by engaging with them on social media as much as possible – follow the story of those that are moving into properties and their developing lifestyles, which become aspirational to the wider audience.

Working with influencers allows us to promote a favourable message, using their content as the medium rather than advertising. And the engagement we see outstrips the engagement with advertising or marketing collateral.

Getting ahead of the curve

This type of insight should be influencing the land acquisition strategies of major developers. For example, knowing that in 10 years Gen Z might be entering the market could ensure home builders develop the right type of property, on the right land, for their prospective buyers.

Many millennials that move into new builds will set about stamping their identity on it – gone are the days of oven-ready – this generation is influenced by Pinterest, Instagram and the like and have a myriad of choices to get their hands on what they want. Developers looking to attract what is now the biggest market in the sector could be looking differently at how they sell. Supplying carcass housing or pre-finish choices of which flooring, paint colour, tiles etc could improve customer satisfaction and act as a profitable add-on for developers – the more new-builds that appear bespoke will only encourage other millennials to jump aboard and share their experience.

Those in the sector could also consider casting the net a little wider than the perceived purchaser – more than half of first-time buyers under the age of 35 received financial help when purchasing their home, so should we also be thinking about talking to ‘BoMaD’ (bank of mum and dad) in our comms? Considering 3D virtual tours or information packs for family based in other areas might help get the deal across the line. Of course, these communications may be better targeted at the baby boomers. It’s a new proxy war to be considered in the fight for a sale.

Getting in early

Providing information, inspiration, aspiration and support to prospective buyers in an authentic way, while bearing in mind the values and longing for experiences of millennials will help them to navigate the complicated process of finding and buying a home. If those in the sector can provide this information as a one-stop shop and be trusted throughout the often long and rocky process, they are more likely to build strong brand salience and be considered as a safe place for many first-time buyers.

References

ONS, July 2020 – https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2020provisional

House hunters travelling hundreds of miles – https://www.bbc.co.uk/news/uk-55668457

Low deposit mortgages return – https://www.bbc.co.uk/news/business-55736160

Forbes, 2019 – https://www.forbes.com/sites/megangorman/2019/08/31/how-millennials-are-revolutionizing-the-home-buying-process/?sh=6be58dc02a02

NAR, 2019 – https://www.nar.realtor/sites/default/files/documents/2019-home-buyers-and-sellers-generational-trends-report-08-16-2019.pdf

Bloomberg, 2020 – https://www.bloomberg.com/news/articles/2020-11-27/buying-property-in-the-uk-best-tips-for-potential-first-time-home-owners

Legal & General, 2020 – https://www.legalandgeneralgroup.com/media-centre/press-releases/bank-of-mum-and-dad-funds-one-in-two-house-purchases-among-under-35s-legal-general-research-reveals/

Gov.uk, 2020 – https://www.gov.uk/government/news/help-to-buy-scheme-extended

BBC, 2021 – https://www.bbc.co.uk/news/uk-55668457

New York Times, 2019 – https://www.nytimes.com/2019/05/08/business/redfin-online-real-estate.html

New York Times 2019 – https://www.nytimes.com/2019/07/23/business/amazon-real-estate-turnkey.html

The Guardian, 2020 – https://www.theguardian.com/business/2020/jan/09/uk-retailers-suffer-worst-year-record-job-cuts-store-closures

Savills, 2021 – https://www.savills.co.uk/research_articles/229130/309460-0

Deloitte, 2017 – https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumer-business/deloitte-uk-young-luxury-shopper-2017.pdf

Rightmove, 2020 – https://www.rightmove.co.uk/news/articles/property-news/escape-to-the-country