Millennials are the new force in the property market and, if you don’t know what a “Millennial” is, then you haven’t been keeping up-to-date with your marketing literature. After the “baby boomers” and the disaffected “grunge” generation, we’ve moved on to the “IT crowd”, the so-young-you- thought-they-were-still-at-school tech natives born since the early 1980s. These new kids on the block are now buying their own homes and redefining the way we live.
“In Europe, over the past five years, the battle to attract the technology sector has been fought between London, Paris and Berlin,” says Liam Bailey, partner and global head of research at leading estate agent Knight Frank. “London has essentially won, but every world city wants this demographic. Talented, young trendsetters are an important part of economic growth, and the question for everyone is: how do you create the right product to appeal to them?”
Though you might assume that this young tech generation would be more likely to consider a flat share than a high-end purchase, a significant number are commercially astute entrepreneurs who have made good (and often great) money in the new-technology industries, often at a much earlier stage than any of their predecessors. “They’re involved in markets where the entry threshold is low and production costs are minimal, which has allowed them a foothold while they’re still very young,” says Ian Marris, joint head of London residential development at Knight Frank. “Unlike the past, when people would build up a business over 30 years, technology start-ups can often cash in after just a few years.”
It isn’t, however, only those who have reaped the benefits of a creative approach to app invention or social networking who are putting firm steps on the property ladder. Many of these 20-35-year-olds have parents who are giving them a helping hand. “A far higher percentage of this generation has money that comes from the bank of mum and dad,” says Joachim Wrang-Widen, senior vice president of Christie’s International Real Estate. “In the past decade, property has performed as one of the best asset classes, and well-off parents see it as a safe bet. They would rather their children lock up money in real estate than spend it on champagne and sports cars.”
But while some youthful high-end buyers may be receiving parental backing, few are mimicking their parents’ lifestyle. “Millennials, whatever their budget, are tending less towards the traditional heartlands, such as Belgravia and Mayfair,” says David Forbes, head of Savills’ private office. “They want something more adventurous, more fun. In London, they’re finding that in east London, Fitzrovia and south of the Thames.”
This reinvention of the traditional property map is a global trend. In New York, for example, wealthy young technocrats are now being drawn to Manhattan’s Meatpacking District on the Lower West Side and, of course, beyond the island’s parameters to oh-so-stylish Brooklyn. In San Francisco, they have moved into Market Street, where the city has launched free wifi internet access, and Northside, where buses deliver them to the Google and Twitter offices.
In the UK, after financial services, technology is one of the biggest drivers of the London economy, and east London’s rapidly expanding “Tech City” around Old Street has become the epicentre of an explosion of up-to-the-minute housing, particularly along the Crossrail route running from Farringdon to Canary Wharf, via Liverpool Street and Whitechapel.
Property developer Harry Handelsman, founder and chief executive of the Manhattan Loft Corporation, is a man who has always had an instinctive grasp of what style-aware Londoners are looking for. In the early 1990s, he introduced loft living to a city still in thrall to multifloored period homes. More recently, his developments at St Pancras Chambers and the Chiltern Firehouse have undoubtedly caught the mood of the moment. Now he’s turning his attention to east London’s Stratford, where, in September, he launched the double-cantilevered Manhattan Loft Gardens tower (studios from £400,000, penthouses from around £10m). “The tsunami of the tech industry has brought a much more international, modern and egalitarian group of people to the capital. These buyers have some nostalgia for the original parts of London and want something different,” says Handelsman. “Stratford itself has benefited enormously from the Olympic legacy, primarily because the government was involved in creating a well-planned infrastructure. It has become a very pleasant place to live.”
The IT crowd in England has not only had an impact on the capital’s traditionally under-appreciated postcodes, it has also colonised several towns and cities outside the M25. The small university town of Cambridge, for example, traditionally known for punting and Nobel laureates, has seen an influx of more than 1,000 technology companies (including a Microsoft research lab) in what’s known as Silicon Fen. “The Cambridge Science Park is very much at the cutting edge of technology,” says Toby Greenhow, head of new homes at Savills in Cambridge. “It has brought in highly talented people from all over Europe, most of whom want to live in the city itself rather than commute from outside. These buyers want the same design features that you find in major cities around the world, such as gyms and concierge facilities. Environmentally aware, they also want energy-efficient homes.”
The arrival of 40,000 new workers has made Cambridge unusually recession-proof (prices are 35 per cent higher than in 2007), and the existing property offering of demure, low-rise period homes has now been joined by chic new developments including the Marque, the city’s tallest residential building, and Berkeley Homes’ Cambridge Riverside, where a sleek four-bedroom townhouse is for sale at £1.56m.
In Brighton, too, tech residents working for companies like social-media monitors Brandwatch and US cloud-based internet- performance giant Dyn have helped drive property values at the best addresses to well over the proposed £2m mansion-tax threshold. Savills, for example, is currently selling a four‑bedroom contemporary house here with sea views and a swimming pool for £4.5m.
Less established areas, of course, tend to attract younger purchasers because of their less established pricing, but Millennial buyers are driven as much by lifestyle as by cost. “We find that they’re more product than price sensitive,” says Marris, “and what’s happening at ground level is very important to them.”
The inner-city trajectory from cool to cash is a familiar one. First come the intrepid pioneers, willing to brave a grittier reality to find a location with charm, heritage and authenticity. Then come the sophisticated media folk. Both types of early settler prefer their streetscape fashionably distinctive, not familiarly bland. “They don’t want branded corporate retailers,” says Marris. “They’re looking for bespoke and up-and-coming shops and restaurants that are individual and unusual.”
Once inside the front door, the IT crowd, wherever they live, seem to share remarkably similar tastes. Unsurprisingly, high on their priority list is the latest domestic technology. “These buyers don’t want to be associated with stuffy old period buildings,” says Lochie Rankin, director of prime central London search agent Lichfields. “They’re looking for property where everything works beautifully and expect as standard the AV, Lutron and Crestron systems that are generally found in upmarket new developments.” In Shoreditch, they’ll find this at Avant-Garde, launched in August, where the two-bedroom duplex penthouse (£3.5m through Hurford Salvi Carr) comes with a custom audio-visual system that controls everything from the heating to the curtains, or, on the born-again Southbank at Berkeley Homes One Tower Bridge, where apartments (from £1.35m through Knight Frank), including the triplex on the 21st storey (£8.5m), feature the latest smart-home technology, which recognises residents and instructs the lift where to deposit them.
In terms of interior design, Millennials are seeking a relaxed contemporary look. “Most of my buyers want an open-plan layout and a decent-sized kitchen where they can cook, socialise and watch TV,” says Amanda Jones, realtor at Sotheby’s International Realty in San Francisco, which is currently selling a five-bedroom house in Pacific Heights ($15m) with just such an arrangement.
Linda Morey Smith, principal director of award-winning design company MoreySmith, finds that a further motif is the mix of modern interiors with a historical outlook. “As well as timber floors, high ceilings and large windows, buyers like beautiful vistas that retain some sense of heritage, an association with an industrial past,” she explains. At King’s Cross, for example, the Plimsoll Building, which will be completed at the end of 2015, offers light, open interiors complemented by views of the sculptural Victorian Gasholders, once part of London’s largest gasworks. Here, a three-bedroom apartment with a balcony to enjoy the view (from £1.625m) is for sale through Knight Frank.
This new generation travels by bike, rather than car. “They are often willing to forgo a property with a parking spot for one that has storage for bikes and is well situated near to amenities,” says Jones. Morey Smith is accustomed to meeting this need: “We always include ground-floor storage for bikes. Everyone wants their bike off the street but they would rather not take it in the lift.” In terms of services, these busy young things demand more than a friendly doorman, expecting on-site sports facilities and greenery to soften the harsher edges of urban existence. “What has always made London such a fantastic city to live in is its garden squares,” says Handelsman. “In high-rise living the challenge is to incorporate that type of space into a vertical community. At Manhattan Loft Gardens we’ve included three sky gardens at different levels, where people can enjoy themselves and come together in a more interesting way.”
For more extended downtime in their hectic lifestyle, convenience is key. “Millennials want easy access, somewhere they can get to on a Friday, let off a bit of steam and recuperate, and return home from on a Sunday,” says Edward de Mallet Morgan, associate partner at Knight Frank. “Ibiza is ideal. It provides both clubs and the potential to chill out completely.” In Cala Conta in San José – just 20 minutes from the airport – a range of modern villas (from ¤2.5 through Knight Frank) offer floor-to-ceiling windows, sunset views and cutting-edge technology.
“Experience” too is a very now theme. “Millennials are more daring and eclectic in their travel tastes,” says Wrang-Widen. “Norway, for example, used to be confined entirely to local buyers. Today you’ll find young international purchasers looking for somewhere to go cross-country skiing, where there’s no noise or light pollution.” Perfect for getting away from the blare and the glare is a high-tech, ski-in, ski-out 11-bedroom timber chalet in Lillehammer (£2.5m through Christie’s International Real Estate).
Technology has, of course, not only transformed property requirements but also the property-shopping experience, and searches today primarily start online. “Potential buyers may be sitting on a beach, looking at their iPad,” says Wrang-Widen. “They expect details to include video footage and walk-through views of every room.” But, if the internet has eased the burden of house hunting, the role of the estate agent has remained remarkably resilient. “Younger buyers do a lot of online research and know the price of everything that’s been bought and sold, but they still want someone who can interpret the data and make the purchase seamless.” So far, that’s something not even the newest technology can offer.