Build To Rent is recovering well from the pandemic across the UK according to a survey.
Construction sites across the UK ground to a halt, or at least started running with skeleton crews, during the initial stages of the Covid-19 pandemic which reduced the delivery of BTR developments to the market, but the industry now appears to be picking up pace once again.
Between Q3 2020 and Q3 2021, the number of BTR developments coming to the market increased by 26 per cent from 50,798 completions up to 63,950.
The number of build-to-rent developments under construction was up eight per cent between 2020 and 2021 and, more impressively, up 10 per cent between 2019 and 2021.
Furthermore, between 2020 and 2021, the number of developments in the planning stage also increased 10 per cent from 90,412 to 99,543.
The research comes from Manor Interiors, a BTR interiors specialist. Chief executive Farhan Malik comments: “Developers and tenants alike have taken to the sector with an eagerness rarely seen. For tenants, it represents a step up from the traditional rental market with higher quality homes, more freedom, focussed around the community and amenities that modern tenants want and expect.
“As such, they’re willing to pay more rent than they would for a traditional private rental home. That’s why, for developers, build-to-rent represents an entirely new avenue of revenue generation, with higher rental values and longer tenancies with much lower levels of turnover.”
Meanwhile separate research from London-focussed lettings agency Foxtons says BTR is recovering particularly well in the capital - and the firm claims it’s creating a benchmark for individual landlords to measure themselves against.
Sarah Tonkinson, Foxtons’ managing director for institutional renting and Build To Rent, says in a new report: “In the UK we were a little late to the Build to Rent party, and while we’re behind the US, Germany and the Netherlands we are catching up fast.
“Renters in Build to Rent developments are buying into a lifestyle. Their every need is catered for. Everyone is equal as everyone is renting. The leases are long and the community feeling is strong. The wider market needs to take notice of Build to Rent developments as they’re the benchmark to which eventually all landlords will be held.”
Tonkinson says there are four key factors she wants to emphasise.
1. A renting revolution: Build To Rent housing stock in London increased 24 per cent in the last 12 months, with almost 55,000 further homes under construction in London now. Demand is high, with 27 per cent of Foxtons BTR units let within one week of coming to market, compared with 16 per cent for the rest of the private rented sector;
2. Community is the cornerstone for Build to Rent appeal: 43 per cent of BTR properties are occupied by one resident (34 per cent of properties are let to just one tenant in the wider market) and 45 per cent are let to two people. The community feel of BTR’s shared work and social spaces, together with the organisation of events, provides a real alternative to the social interaction people achieve when considering a traditional rental property;
3. Value for money: While BTR average rents are higher than the local market average, BTR residents get more ‘bang for their buck’, insists Foxtons. Over half of these developments have a gym on-site and almost a third provide residents with access to a rooftop area with views of the capital;
4. The impact on private landlords: The agency claims BTR is raising the bar for resident expectations. Private landlords need to take notice of why these developments are so appealing and what this means for their offering. Quick wins that could help private landlords remain competitive may include installing bike storage and allowing pets; speedy resolution of issues and pro-active maintenance; and highlighting amenities within a few minutes’ walk, including gyms, green space, parking and co-working office space.
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BTR clearly has a place in the PRS but from the statistics above they are for singles & couples who are prepared to pay extra for more amenities and who are happy living in flats in cities.
I can't see BTR being the answer for families, who want gardens & good schools not gyms & shared work spaces.
They are coming too. And it’s a good thing. By raising our game we will survive and perhaps get a bit less criticism!! Market dynamics will always win over any Government initiatives.
I sold my two Penthouses in M1 central Manchester just before the Pandemic to buy more family homes in the suburbs. Whilst they were beautiful apartments and gained great rents for many years I could see the writing on the wall and I’ve been proven right. There are thousands coming on to the market at the moment. The real story here though is that Governments should stop fiddling with tax rates and licensing and facilitate improvement in the market through legislation and then stand back and let market dynamics do the rest. I’ve always said I’ll happily be made redundant as a result of the market moving past me, it’s up to me to protect my business model by staying competitive.
I don't think BTR will impact on me they seem to be after the wiz mob, I'll stick to the proper working class.
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