The Rise of the ‘Lifestyle Tenant’: What Gen Z Renters Are Really Paying a Premium For

Generation Z is reshaping the UK rental market in ways few landlords or developers predicted. No longer satisfied with four walls and a postcode, this cohort is driving demand for homes that reflect identity, wellbeing, convenience, and community. They’re not just renting a property — they’re renting a lifestyle. And they’re willing to pay more for it.

Recent data shows just how powerful this demographic has become. In 2023, Gen Z renters paid £30.5 billion in rent, a dramatic rise from just 1% of the rental market a decade earlier, now representing 36% of all UK renters. Their influence is accelerating as higher mortgage rates keep younger adults in the rental sector for longer.

But what exactly are they paying a premium for?

Digital‑First Living: Convenience as a Core Amenity

Gen Z is the first fully digital‑native renting generation, and their expectations reflect that. According to recent research, 63% prefer a tech‑first rental experience, from digital contracts to app‑based maintenance requests. Meanwhile, 40% favour text or AI‑based communication with landlords, and 25% say better tech is the number‑one improvement they want in their current rental experience.

For lifestyle tenants, convenience isn’t a luxury, it’s a baseline requirement. Properties offering seamless digital onboarding, smart‑home features, and transparent online communication stand out immediately.

Amenities That Support Work, Wellness, and Social Life

The Build‑to‑Rent (BTR) sector has become a magnet for Gen Z, with 30% of BTR tenants aged 16–24, compared with 22% in the wider private rented sector.

Why the shift? Amenities.

BTR developments increasingly offer:

• Co‑working lounges
• Fitness studios
• Pet‑friendly policies
• Social spaces
• High‑speed connectivity
• Longer leases (with 80% offering three‑year terms)

These features align perfectly with Gen Z’s blended lifestyle, where work, wellbeing, and social connection overlap. In a world where remote and hybrid working are the norm, a building with a co‑working space isn’t a perk, it’s a productivity tool.

Neighbourhood Psychology: The Pull of Micro‑Communities

Gen Z renters are highly attuned to the feel of a neighbourhood. They value walkability, independent businesses, green spaces, and cultural identity. They’re drawn to areas where they can build community, not just commute.

This behavioural shift mirrors the rise of the “15‑minute city” concept, places where daily needs are within easy reach. For lifestyle tenants, the neighbourhood is an extension of the home. A flat above a sterile high street won’t compete with a slightly smaller apartment in a vibrant, mixed‑use district with cafés, gyms, and creative spaces.

Transparency and Ethics: A New Non‑Negotiable

Gen Z renters are also more demanding when it comes to fairness and clarity. They expect:

• No hidden fees
• Clear contracts
• Fast repairs
• Ethical management

This generation is quick to spot misleading clauses and even quicker to walk away. Transparency isn’t just appreciated, it’s expected. And with online reviews and social media amplifying tenant experiences, landlords who fail to meet these expectations risk reputational damage.

Affordability Meets Value: Why They’ll Pay More for the Right Place

Despite rising rents, with the average newly let home reaching £1,348 per month and UK tenants paying a record £85.6 billion in rent in 2023, Gen Z is still willing to pay a premium for properties that deliver lifestyle value.

This isn’t frivolous spending. It’s strategic. They’re choosing homes that support mental health, productivity, social life, and long‑term stability. In a challenging market, value beats cost.

The Bottom Line for Investors and Developers

The rise of the lifestyle tenant isn’t a trend — it’s a structural shift. Gen Z is signalling what the future of renting looks like:

• Tech‑enabled
• Amenity‑rich
• Community‑driven
• Ethically managed
• Neighbourhood‑centric

Investors who adapt to these behavioural drivers will outperform those clinging to outdated rental models. The next generation of renters isn’t just looking for a place to live, they’re looking for a place to belong.

For trusted investment advice that you can rely on, speak to our friendly advisors.