Build to Rent is still in its formative years. But, it continues to prove itself as a durable form of investment. It has recently shown resilience in the face of the unexpected economic downturn due to COVID-19.
The BTR industry is set to experience an increase in supply. Which, in turn will lead to an increase in competition. To stay ahead, focus on tenant-oriented strategies will be key. As well as knowledge of what leads tenants to choose one development over the other. Getting tenants to sign up for long term tenancy is crucial to the success of any BTR development.
Treatment of the Tenants Is on the Rise
Focus on the tenant’s experience is fundamental to the rental market. Any rental built with the purpose of housing but not accounting for wants and needs is a disservice to the tenant. To achieve an optimum level of ROI, landlords or investors seek to entice tenants by focusing on tenant-oriented services and amenities.
The growing interest in tenant treatment is due to the disregard given by most landlords to the growing needs of long term tenancies. In particular the following two reasons are the biggest cause of lease termination: poor quality of housing and poor tenant service.
Poor Quality of Housing Affecting Long Term Tenancy
One might be inclined to think that unaffordable housing might be the main reason why tenants move. However, substandard living quality is one of the most common reasons. According to a survey by Savills, tenants who prioritise better quality housing outnumber those who chose affordable rent 3 to 1.
The bulk of rental housing available within the UK is deemed to be in average condition. But, in reality, it’s usually less than average. This is the primary reason for tenants moving. The shocking state of rental housing is the consequence of many buy-to-let landlords spending little on improvements to their properties.
Poor Customer Service
In addition to the poor quality of housing, tenants are also faced with poor property management and lettings services daily. Despite the Government’s efforts to help regulate the sector, buy-to-let landlords &/or agent’s responsiveness to repair and carry out maintenance is, at best, slow.
Poor service is a big concern for many tenants. Knight Frank reported that easy to reach, honest & reliable managing agents were paramount to tenants needs. Transparency and competitive fees are also among other desires.
The lapse in customer service from the buy-to-let landlords provides BTR with an opportunity to distinguish itself with outstanding customer service. This is currently yielding positive results through the strong referral rates seen by the newly established developments.
What Tenants Want for Long Term Tenancy
The following are the top customer service requests;
- Transparency
- Easily contactable
- Competitive fees
- Quick responses to queries
- Use of reliable contractors
- Good communication skills
The following are the top amenities requested;
- Utilities
- Cleaning services
- On-site gym
- Pet friendly
- On-site security
- Roof terrace
- Storage
- Cinema room
- Playground
- Social events center
Below we will elaborate slightly on 3 of the top 5 amenity requests;
Cleaning Services:
In-house cleaning services is a major benefit that appeals to tenants. Busy tenants will appreciate trustworthy cleaners who already have access to their apartments. They can also trust that the general building and amenities will be clean and tidy for their use.
Pet Friendly:
As the cost of housing continues to increase, more and more people are looking for long term tenancies to create a home. Allowing pets is music to the ears of all animal lovers who won’t be hindered in their top choice of apartment, or their ability to live the life they want in a rental.
On-Site Security:
It’s essential that developments are as secure as possible with the appropriate human & technological measures in place. Having a 24/7 desk puts tenants at ease as they don’t have to worry about strangers walking in to the building. Plus, technical measures like CCTV in lifts & corridors lets tenants feel safe in their own homes.
Conclusion
With the projected increase in the supply of BTR developments, tailoring to the immediate needs of tenants will ensure development success. To achieve this, it is necessary to really understand the desires of tenants.
By improving the shortcomings often associated with renting, BTR’s are guaranteed a competitive edge in the market. Furthermore, creating space that allows tenants to live the life they aspire to live without buying, will result in their want for long term tenancies.
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