When it comes to any housing scheme, location is a crucial aspect of deliberation for any developer. With Build to Rent as a tenant-oriented housing scheme, the importance of location carries more weight. As where a BtR development is situated can positively or negatively affect the performance of the development.
In light of recent events like the coronavirus pandemic and the subsequent lockdowns, tenants need regarding location is shifting. For instance, in London, the need for a quick commute to the office is no longer as important for tenants. As many now work from the comfort of their homes. Now tenants are more interested in being located near recreational spots, away from the bustle of the city centre.
This article will examine the changing Build to Rent location preference, most sought-after locations and its impact on rental value.
Build to Rent Location Preference
Based on HomeViews 2021 BtR report, an indication of a cultural shift was revealed in how Build to Rent residents reviewed their development location.
It would seem that residents are becoming less interested in BtR development in the central cities. Especially in London, where residents living outside London constantly rated their location higher than they did within the capital. According to the report, regional locations have a higher average rating than capital locations, with regional locations, rated 4.70 over 5 and capital locations rated 4.48.
Even the three highest-ranking developments for location in London were at least four miles away from the central city. It would seem that the effects of Covid-19 have London residents less impressed with their locations, as quick commuting is no longer as important. Residents in the suburbs now travel less to the city centre and would rather spend their time on their local high street.
The Most Popular Locations for Build to Rent In The UK
Currently, London remains the most popular location for Build to Rent in the UK based on the number of developments. With London housing more Build to Rent schemes than the combined number of BtR schemes in the regional cities. According to HomeViews latest report, the capital city now has 228 completed Build to Rent schemes, with another 69 schemes underway. While the regional cities have a combined number of 117 completed BtR schemes and 60 on the way.
A breakdown of the regional Build to Rent schemes places Manchester as a far second most popular location with 40 completed schemes and another 12 schemes in the pipeline. An even further third in Birmingham, with 8 completed Build to Rent schemes and 7 schemes in construction. Closely following Birmingham is Liverpool, with 9 completed schemes and 2 underway. Leeds is next with 4 completed schemes and 5 schemes in construction. And Bristol with 3 completed schemes and 3 schemes on the way.
In terms of the population of Build to Rent schemes in a city, these are the most popular locations for BtR in the United Kingdom.
The Most Sought-After Build to Rent Locations for Tenants
The most sought-after locations for BtR are constantly shifting based on tenant preferences and external events. In last year, the fastest-growing locations for BTR in the UK are Birmingham and Manchester.
Birmingham
Although Birmingham still has fewer BtR schemes when compared to Manchester, it has recently become one of the fastest-growing BtR locations. According to CBRE data last year, a third of 5,000 residential units built in the city, was BtR projects. This rapid growth in Birmingham’s BtR market can be linked to the impressive performance of the first wave of developments.
Birmingham Build to Rent schemes are taking full advantage of the best locations within the city, as there hasn’t been much residential development in the city centre for years. Two of Birmingham’s BtR developments (Aston Place and Allegro Living) having perfect HomeView location score and are ranked the highest nationally for location.
The resident reviews revealed that what resident’s value about their BtR development’s location are proximity to transport links, restaurants and local amenities.
Manchester
Manchester has maintained a strong performance in the location ratings. Three BtR developments in the city ranked among the overall top ten schemes for location. Green Rooms MediaCityUK is placed fourth and was formerly the overall best for location in 2020. Duet MediaCityUK placed sixth and Affinity Living Riverview as tenth.
Much like Birmingham reviews, residents liked the nearness to famous eateries and the city centre but away from the hustle and bustle.
The Impact of Location on The Rental Value of The Build to Rent Developments
Given the high ratings of suburban Build to Rent schemes with regards to location, this means an increase in the demand for them. Although it is too early to see these effects on the BtR market, more suburban schemes making it to the top ten list could point to a gradual shift towards suburban schemes.
Residents now have an increased appreciation for green spaces, which is common to suburban BtR schemes. For instance, a resident at Superenting’s Duet MediaCityUK development said: “Nearby pedestrian areas and small parks are great for walking the dog with larger parks on the doorstep when needed.”
And, Build to Rent schemes where green spaces were not readily available were rated lower. “The only element I wish was improved is more green space nearby to enjoy. The parks are small and very close to buildings which is a shame.”
Finally
Location needs are changing, and residents who have spent most of 2020 in their developments now come to value the calm of the suburbs – over the hustle and bustle of the central cities. These subtle changes are bound to impact the future of the UK BtR market.