Introduction
The Build to Rent sector in the UK is continuing to grow and attract investment, with a recent study by Savills highlighting that the sector now accounts for almost a third of all new housing stock.
And it’s not hard to see why – with tenants increasingly valuing sustainability and community engagement, Build to Rent developments are well placed to offer both.
Build To Rent homes are also becoming increasingly popular with tenants. Build to Rent properties are often designed with sustainability in mind, making them cost-effective to run and eco-friendly.
Build to Rent communities ensure that new residents are able to live in a sustainable neighborhood with social responsibility areas which have both gained an increased amount of importance to today’s tenant – given the events of the last 5 years (global climate crisis and COVID)
Demand Vs Cost
Historically, profit-focused for sale developers have refrained from implementing all the sustainable practices available on the market today as it tends to have a negative impact on bottom-line profit.
Given that BtR is a long-term investment and as such considers the net operating cost (cost of running a development). Spending more capital upfront on more sustainable development will create a compounded return over the life of the development through increased NOI.
Thankfully, there are several ways in which Build to Rent developments can be made more sustainable without breaking the bank. One great example is using passive design principles, which can help reduce energy usage by up to 80%.
Other measures that can be taken include installing energy-efficient appliances and using recycled materials in construction.
In 2021 we have seen a sharp increase in tenants willing to spend more on monthly rent to live in a development that has a social and environmental conscience.
The Data
The Data, taken from the Homeviews 2021 Residents sustainability report show two key indicators;
- 70% of tenants who responded care about sustainable features
- The most in-demand feature is energy saving.
Closing point
From the data, it is clear that Build to Rent developers who focus on sustainability features, whether this is through energy efficiency or creating a community ethos, are more likely to attract and retain tenants.
In fact, the data shows that for every 10% increase in a development’s sustainability features, there is a 7% increase in demand from tenants.
Not only do tenants want developments that are sustainable, but they are also willing to pay more for them.
In fact, the data shows that when there is an increase in sustainable features within a development tenant rental income achieved an average increase of £10 per month.