Welcome back to the UK Build to Rent Q&A series. Join us this week as we share our Q&A focused on the renters market with John Doyle, Head of New Homes at OnTheMarket.
OnTheMarket plc, the majority agent-owned company which operates the OnTheMarket.com property portal, is a leading UK residential property portal provider.
Its objective is to create value for shareholders and property advertiser customers by delivering an agent-backed, technology enabled portal, offering a first-class service to agents and new homes developers at sustainably fair prices and becoming the go-to portal for serious property-seekers.
OnTheMarket provides a unique opportunity for agents to participate in the equity value of their own portal. Agent backing and support enables OnTheMarket to display Only With Us properties to serious property seekers either exclusively* or 24 hours or more before agents release these properties to Rightmove or Zoopla.
* Exclusive properties are properties advertised at OnTheMarket.com by customers who do not list their properties with either Rightmove or Zoopla.
About
John Doyle is Head of New Homes at OnTheMarket. He joined OnTheMarket in 2018 and successfully helped to build the Estate Agency Central Sales department. Having spent the previous six years at Rightmove working with housebuilders from large major developers to small SMEs he was given the opportunity to build the OnTheMarket New Homes division. John works with a wide range of clients from large national housebuilders, Build to Rent developers and SME housebuilders.
Q: How have you noticed a change over the last 5 years of renters in the market? Particularly their understanding the concept of Build to Rent and the offers it brings?
JD: The rental market in the UK has grown significantly over the last five years due to increasing house prices and a continued lack of supply, meaning that approximately 30 percent of the country’s housing stock now sits in the private rented sector (PRS). This period has seen huge investment in Build to Rent (BtR), with new developments appearing all over the country from some of the most recognised house builders. This rapid growth, alongside increasing promotion of these schemes on portals such as OnTheMarket.com, has raised awareness of BtR to renters.
The benefits of BtR developments over renting with traditional private landlords have become much more widely understood by consumers in recent years.
Some of these potential advantages include the provision of amenities such as free Wi-Fi, on site laundry, bill paying services and a greater flexibility in the lease length available for renters. Because the schemes are specifically built for the rental market, they allow tenants to take longer leases, but in some instances also offer greater flexibility with the option to leave on short notice
Q: How could the message of the Build to Rent philosophy and sector be better communicated to tenants from the day they start their renting journey/ search?
JD: Due to BtR still only making up a relatively small proportion of the overall market, the challenge for the sector is in continuing to increase awareness and understanding amongst renters on the benefits of these schemes.
This should start when the development is first completed in the promotional literature that’s produced and the messaging put out to potential tenants on portals such as OnTheMarket. This messaging should be present in the everyday physical experiences tenants have when living in the development.
The concept of BTR is brilliant and is only going to go from strength to strength, so tenants will naturally become more familiar with the idea – and the major players involved – as the sector grows.
Q: With the world and its technology ever evolving, what do you see as the fundamental trends that will emerge around rental tenants demands over the coming 5 years.
JD: The COVID-19 pandemic accelerated existing future work trends, with more people than ever adapting to working from home than ever before.
Communal workspaces, alongside the very best broadband speeds, will no longer be seen as a ‘nice to haves’ but as essential elements of a good tenant experience.
One of the key changes brought about by the pandemic was the ability for agents and developers to arrange virtual viewings. BtR developers will need to ensure that their digital content matches the quality of their buildings so potential tenants can access portals like OnTheMarket to see instantly what the properties are like and inspect the quality of the amenities.
Q: With regards to oversupply – where are you finding the areas of the market to be tapped out of the need for rental developments. Macro (UK wide) Micro (London Specific).
JD: There is a very well publicised shortage of properties for sale across the country and rental market is similarly characterised by a lack of supply, evidenced by rapidly rising demands from landlords. According to Knight Frank, the number of rental properties available in the capital last month was down 44 per cent on 2021, and 25 per cent below levels seen before the pandemic.
With increased legislation and taxation within the rental market, there is evidence that some private and ‘accidental’ landlords have chosen to leave the sector which, along with growing tenant demand, has left plenty of growth potential for the BtR across the country.
Q: Let’s reverse the above question and ask what areas of the country you feel are largely under supplied of quality rental developments and thus could use Build to Rent investor attention. Again, on a macro (UK wide) and Micro (London) bases please.
JD: My experience is that this is largely centred around major UK cities such as London and Manchester, where demand and volume of tenants is greatest. However, it will be interesting to see over the coming years whether BtR developers focus on the large cities or on their outskirts, which have benefitted from the growing popularity of homeworking, better affordability, and more open space.
Q: If you were employed as the head of Marketing for a Build to Rent operator and had a near unlimited budget – how would you market Build to Rent developments to renters in 2022.
JD: The rental market is incredibly fast moving and tenants are savvy when searching for properties, so promoting your development and brand on portals such as OnTheMarket is essential to ensuring they find what they’re looking for in one place. Tools such as our ‘OnlyWithUs’ feature promote properties 24 hours or more before they’re advertised elsewhere, giving tenants valuable time ahead of the competition.
If I had an unlimited budget, I would take the opportunity to promote the fantastic amenities that many of the BtR developments have. If tenants can understand the lifestyle that comes with these developments then you would see the popularity and demand increase further.
Q: Are there any final thoughts and personal opinions on the direction of the rental market within this sector you’d like to share?
JD: We have a well-documented cost of living crisis, which could make the chances of getting on the property ladder even more challenging for first-time-buyers. With some European countries having a private rented sector of up to 50 per cent we could be entering into a similar model, which would present a significant opportunity for the sector within the UK.
A Big Thank You… to John Doyle for taking the time to respond.
If you have any other questions regarding this interview, you can reach out to OnTheMarket here.
Our content calendar has enough free space for one or two more contributors to this series. If you feel you would offer value and have experience in build to rent investment, design, management or ESG – contact us here.
Thank you for reading.
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