A new rental brand, Essential Living, says it will “disrupt housing” by making renting “service-led and socially acceptable”.
The company aims to encourage large-scale long-term investors to become landlords, instead of “amateur” buy-to-let investors. It says this could eventually weed out the criminal rogue landlords for good and encourage a new service-driven mentality that it claims has revolutionised student housing in major towns.
Essential Living is backed by M3 Capital Partners, a large fund manager of American pension cash. However its founders are veterans of the London housebuilding sector.
The company has eight developments underway across the South East with plans to build a portfolio of 5,000 homes that it will design, build and manage itself.
The unique selling point of Essential Living is that its developments will be designed specifically for renters. It claims this will mean high quality properties “a world away” from much of the country’s poor quality rented stock. Properties will offer equal sized bedrooms so sharers no longer have to flip a coin for the best room, large shared spaces, an on-site concierge, on-site maintenance, and a high focus on customer service.
Martin Bellinger, chief operating officer of Essential Living, said: “You have the ability to create genuine communities in these buildings. If the building is owned by one landlord, then it’s in their interest to give some of the space to communal use.
“The idea is that your home doesn’t start at the door to your flat, it starts at the front door of the building. Housing is currently seen either as an investment or as a home - this is about changing it into a service.
“Everyone agrees that tenants should be treated as customers and we think that by designing homes specifically for rent – and managing them properly – this can happen. Onsite maintenance will avoid tedious battles securing plumbers or electricians, while booking systems and longer tenancies will cut out costly agents' fees that snare people who are forced to renew tenancies every six months.
“Our aspiration is to take the hassle out of renting by giving people the same consumer confidence they get buying a TV from John Lewis into renting a flat. It’s currently unheard of in Britain, which is very sad. We’re speaking with legal experts at the minute to see if it’s possible to wrap everything – such as utility bills, TV and internet, insurance and other costs – into one fee which will reduce admin for renters and help people better plan their outgoings, allowing them to save.”
The company has bought numerous sites in locations including Maidenhead, Croydon and Greenwich, as well as central districts like Swiss Cottage, Canary Wharf, Bethnal Green and Archway.
Scott Hammond, Essential Living’s managing director added: "The only way investors can currently get exposure to renting is by buying a buy-to-let property, which comes with all kinds of risks they don’t necessarily want. As the sector gains scale over the next decade we’ll see companies backed by institutions opening it up to wider investment by converting themselves into investment trusts or listed entities."
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Comments
This isn't a new concept. The idea of building accommodation solely for renters is what our housing associations do. I accept they aren't luxury accommodation, in the very best areas of our community but the popularity of these schemes at first let is very encouraging. Its the second, third, fourth let etc that then becomes more difficult. With high service charges and bills included the total rent for the property will be much higher than the refurbished terraced property down the road with a small garden and the anonymity of whether you own or rent the property. Lets just look at this from an investors point of view high quality desirable scheme that includes all bills and rent for everyone sounds like an innovative investment, surely this is a great investment but what happens if the tenant defaults on the rent or decides to abandon the property and leaves the heating on full. Who picks up the expensive utility charges and loss of service charge. Sounds like a risky investment to me. Not something I will be rushing to put my money in.
And this will lead to establishment of property syndicates, who promise the earth to investors but hype up the purchase price of the properties they buy for the syndicate, thus ripping off the investors.....