Build to Rent is a relatively new form of housing system within the UK. As the name would suggest, they are developments designed solely for the purpose of renting. BtR also comes with a variety of advantages that set it apart from regular renting.
What sets BtR apart from traditional renting is the focus on service.
Professional on-site management, social amenities and much more are commonly provided.
Renting is often associated with a number of issues. Renters are often left dealing with unfavourable conditions. And, landlords are often reluctant to shell out to make repairs. The issue of short-term leases also leaves renters with no security of a long-term stay in their homes. This is where Build to Rent steps in to disrupt the market.
Click here to read how the rise in mental health awareness could impact BtR.
What is Build to Rent?
Build to Rent is effectively the development of new apartment blocks that are built specifically for renting, and are usually owned by institutional investors. To learn more about Build to Rent you can read our History of Build to Rent article here.
The Growth of Build to Rent in the UK
The demand in the rental market in the UK is on the rise. As of 2020, there are 20,800 Build to Rent developments across the UK, although around 118,000 are still undergoing construction. According to Savills, Build to Rent investment totalled £2.6 billion in 2018, 11% higher than in 2017 and the highest level of investment in Build to Rent since 2014.
Build to Rent has to perform for both investors and residents, the design and layout need to be operationally efficient. This means that designers have to consider running costs, the quality of the building and how both residents and the onsite management team will use the spaces. Management of Build to Rent development is extremely important for a prospective tenant. In the Forbes “8 Ingredients For A Perfect Build To Rent Recipe” article, the author states that a sense of community in a Build to Rent home is essential, as it leads to greater retention rates in the development.
Here are our top Factors Influencing Build to Rent Appeal to Tenants.
Location:
As with any housing project, location is vitally important. Especially for Build to Rent, being a service-driven housing solution. A BtR needs to offer homes in the right location to support the density of the scheme & sustain the community. Housing at well-connected transport locations is preferable.
Social integration:
Build to Rent offers great social integration benefits by providing space for shared communal facilities and management services like a secure parking space. And other commercial uses like gyms, restaurants, events spaces etc. Residents also enjoy the opportunity to upgrade or downgrade their rental levels within the Build to Rent development.
Operational Efficiency:
When a Build to Rent scheme is at 200 units (at least), it delivers the most optimum service and efficiency of any Build to Rent. At this point, it is exceptional in the facilities and services that its tenants enjoy, unlike private housing schemes. This operational efficiency is one of the major selling points of the Build to Rent initiative.
Communal Facilities:
Renters enjoy a wide range of communal facilities. The following services or facilities are frequently considered; concierge services, games room, gym, lounge, bars/cafe, delivery storage and refuse chutes, as well as loading bays to the back of walk-through elevators for smooth moving in/out days, which will occur more frequently than in a private house.
Apartment Mix:
A mix of apartments: small, medium and large, are suitable for different budgets. The research found that the ‘dumbbell’ two-bed apartment with identical bedroom layouts is the workhorse model in the US. Build to Rent investors reported they had the widest appeal to sharers, young families, and down-sizers. All these are further being deployed in many emerging schemes in the UK. It’s good to design a variety of apartments to cater to all user types and build a community. The designs should mix with diverse other layout types so as to suit different renter’s requirements.
Simplicity and Tenancy:
Apartments specifications should be simple, to optimise maintenance, durability and replacement strategies. Build to Rents are not hotels, so it is important that the tenants can customise, paint, fix items to the walls and personalise their space. The more they can make it feel like their home the longer they are likely to stay. A long tenancy is one of the great appeals of Build to Rent apartments.
Security:
An important factor for tenants choosing a home is safety. Build to Rent should ensure security in all schemes. Cameras in common areas, lifts, access swipe entry, protection of storage spaces, fire exits, etc. We should also utilise technological automation for easy access. Bluetooth card readers and door locks for the front entrance. Portal management of car parks, and other services such as scheduling building management requests.
Conclusion
A critical look at housing trends shows that they are shifting more towards renting. It’s a result of several factors ranging from changing perspectives towards rented accommodation, to the lack of affordable accommodation for sale & the improved and consistent upkeep of the apartments.
Build to Rent is different from normal rental apartment blocks. There are a few businesses getting it right at the moment. These companies will lead the market and achieve the premium the underwriting model is trying to achieve. While those who do not meet the demands that BtR management philosophy requires, may struggle to keep their development without void periods.
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