Tenant experience is a major factor that distinguishes Build to Rent from other rental housing schemes. As the driving philosophy behind the creation of Build to Rent is the provision of tenant-oriented housing. This means that tenant needs are a primary concern in every aspect of the scheme. This focus on providing tenants with valuable housing has set BtR apart from traditional housing rental. And this has been reflected in the exponential growth of the sector in the last decade.
However, what is of value to tenants is not easily identifiable and it is constantly changing. This is why polls and reviews are conducted regularly to keep track of these changes; so that operators & developers can stay ahead of the curve. This article intends to provide you with the current overview of what brings the most value to BtR tenants.
But first!
What Is Value to A Tenant?
In terms of BtR, value would entail tenants getting their money’s worth. However, this does not give a detailed idea of value because it is very subjective and relative.
In the subjective sense, value is anything that makes a BtR development worth living in. This could be anything from the amenities to communal spaces to apartment size, to the other tenants living in the development.
Value can also be relative as both high-end BtR developments and low budget developments are rated among HomeViews top ten ratings of developments for value. Showing that value is not only limited to luxurious BtR developments.
Hence, there is space for all categories of BtR developments so far as it provides the expected value in relation to its price.
Which Features of a BtR Can Add Value to A Tenant Over A Regular Renting Experience?
According to HomeViews 2021 report, the value metrics remains an aspect where there is always room for improvement. This year’s value rating once again is the lowest across all metrics, with an average score of 4.08 out of 5 points. So how can BtR operators & developers improve their value metrics?
Resident Events
Based on the reviews from the HomeViews latest report, resident events are a notable feature among the high-ranking developments. As residents constantly mention the events to be of importance to them. Several residents of Canary Wharf Group’s 10 George Street (an all-time chart-topper and most rated for value) also confirmed the resident events as something that added value to their experience.
“I want to mention the incredible array of events organised by Vertus, from Wine Wednesdays to virtual trivia and bingo nights – there is always something to look forward to,” said one.
These resident events are community-centric, and community building within a BtR scheme is known to improve its retention rates.
Apartment Size and Design
Space is something that residents’ value highly, especially when it concerns their apartments. Having a spacious apartment is something residents considered as value for their money. As an L&G’s West Tower resident noted:
“My particular one-bedroom apartment, which is smallest available size, offered surprising more space and storage opportunities than I initially expected.”
Also, apartment design is another thing that residents’ rate high in value as apartment design features severally in reviews concerning good value for money. A resident at The Skyline in Manchester said:
“still a fresh design, huge apartment space for city centre so excellent value for money in that respect.”
How Do Tenants Feel the Rental Premium of A BTR Compares with Traditional Housing Rental?
It is a known fact that residents of BtR schemes pay more on rent than the local housing rental. In comparison to traditional housing, residents ranked their developments higher, as residents acknowledge that they are happy to pay a rental premium because of the standard of their building and the quality of service they received. The willingness of residents to pay higher than the local market rate is a key indicator of the high value provided by BtR developments.
Also, residents consider renting from an institutional landlord as something of value to them. Although from the reviews, it is hard to outline the tangible reasons behind the differences between renting from a private landlord and an institutional one. However, this positive feedback suggests the added value of having an institutional landlord.
As shown in a Manchester Life’s Cotton Field Wharf resident’s review,
“Love my layout and quality of my home. Good value for money too. Love the benefits of renting through a corporate landlord.”
Impact of Covid On the Perception of Value for BTR Tenants
Like most aspects of the economy, the BtR sector was not exempt from the ripple effects of the COVID-19 pandemic. In terms of value, Covid has influenced how residents view the affordability of rent, as the facilities that residents are known to enjoy were no longer available due to social distancing restrictions.
Consequently, facilities like the lounge, gyms, WFH spaces and resident events that tenants valued and paid a premium for was no longer accessible.
Leading to a request from tenants for rent freezes or reductions at the peak of the lockdown. A resident in a London scheme expressed by saying, “The value for money can feel a bit low in this post-covid world since prices still increased despite an overall decline in rent prices.”
Overall, how operators handled the pandemic has been a test of the BtR assurance of providing tenants value higher than the traditional landlord. And despite the impact of Covid on value, the average scores on value by HomeViews have increased from that of the previous year. From 3.99 out of 5 points in 2019 to 4.08 in 2020.
Conclusion
The value metrics continue to be the lowest of all metrics across the board. However, there are signs of growth in value, despite the unprecedented effects of Covid on the BTR sector. Although what creates value for tenants are difficult to pinpoint, it is necessary to provide tenants with the value that the BtR philosophy justifies with a higher rental premium.
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