The Universal Appeal Of Build-To-Rent Just Got Bigger
Build-to-rent is a fledgling industry. Though not a new concept itself — renting from a private landlord is an age-old practice — it has only started gaining traction in the UK in the last few years.
However, the sector is already changing. No longer are developers and property owners aiming schemes purely at “generation rent”. Today, the sector has a wider appeal.
“Tradition is now history,” Irwin Mitchell partner Andrew Wallis said. “There is a clear evolution within the BTR market and it won’t be long until all demographics are covered in equal measure — not just young professionals.”
As the benefits of intergenerational living become more widely realised, those responsible for creating and growing the UK’s BTR industry are faced with the challenge of designing schemes that appeal across the board, both now and as the sector continues to evolve.
Universal benefits of BTR
The UK’s BTR sector is booming. More than £1B was invested in the market in the first quarter of 2019 alone, a fourfold increase on the same sector in 2018, according to CBRE. There are now 140,000 BTR units completed or in the development pipeline across the UK.
While the assumption was that younger people were being drawn to BTR properties due to the spiralling cost of buying a house, this is no longer the case, according to Wallis. It is becoming an active choice, not a necessity, for many people. Data from the Department for Work and Pension’s Family Resources Survey shows there are twice as many people aged 35-54 renting than 10 years ago.
“Statistics clearly represent that older generations are becoming attracted to the market — both its flexibility and its affordability for a well-balanced lifestyle,” Wallis said.
The quality and variety of BTR properties now available have caught the eyes of people across the UK. We have become a society used to convenience and instant gratification — why not live in a home that includes all utilities, that is maintained to a high standard and that is located, usually, in the heart of a vibrant community?
Creating a sense of community is what many pundits believe is the overriding benefit of BTR. Loneliness is becoming a growing social problem in the UK, so much so that in 2018 the UK appointed its first ever Minister for Loneliness. The number of over-50s experiencing loneliness is set to reach 2 million by 2025-26, a 49% increase since 2016-17, according to Age UK’s 2018 report “All the Lonely People: Loneliness in Later Life”.
Managers of BTR schemes are becoming highly creative about the events they hold for residents and the social groups they make available. Through shared living spaces and amenities, people can be brought together far more effectively than if each person lived in their own house.
“Build-to-rent is about creating communities that are both sustainable and promote healthy wellbeing,” Wallis said. “Naturally, therefore, BTR could be a key to solving our loneliness problems. This applies across all demographics.”
Schemes fit for the future
As with any fast-growing sector, the BTR scene is changing. Schemes are erupting from the ground rapidly, so any given scheme needs to have a wide appeal to ensure its success. It isn’t clear how fast take-up will be from different demographics.
A one-size-fits-all approach is doomed to fail. It is unlikely that the same design or set of services will appeal to a 20-something-year-old who just left university and a 40-something-year-old who has an established career and family. One tactic is to create a solid, though unembellished, level of physical amenities and to offer varying layers of service on top.
“It’s becoming clear that the tenant experience trumps amenities,” Wallis said. “Management and services are key, which means that creating a blend within buildings can become easier. All demographics appreciate certain levels of service. Practical and efficient amenities can also lower operational costs and increase customer retention.”
Creating a blank canvas with the personality of a scheme layered on top has the added benefit of allowing the scheme to evolve as necessary. The BTR schemes in the pipeline across the UK are often in emerging or changing locations, which could be very different in 10 years’ time.
“Design with flexibility in mind, but with the focus upon the community and satisfying lifestyle trends,” Wallis said. “Creating a sense of place and location remains key.”
It is likely that in 20 years, the UK’s models of homeownership and renting will reflect those in continental Europe even more strongly. Those creating schemes today have the chance to influence how the market evolves, forging new ways for all members of our society to live together.
This feature was produced by Bisnow Branded Content in collaboration with Irwin Mitchell. Bisnow news staff was not involved in the production of this content.