Paul Belfield, Director at Rund, explains why the Build to Rent market is booming, as featured on Show House.
“Developers in the UK had been flirting with the idea of an institutionally backed purpose built and managed private rental sector long before it arrived. Rewind to 2012 and Build to Rent (BTR) was first introduced as part of the legacy programme attached to the Olympic Games, transforming Stratford’s East Village from Athlete’s accommodation into private rentals. Although this rental model was not met with immediate popularity, and success impeded by fear of the unknown, 9-years later and Build to Rent is finally having its moment.
“In June 2014, the UK boom in investment for BTR properties truly began. According to Savills, by 2019, the number of BTR units completed or in development had increased seven-fold to over 140,000 since the previous period. Whilst the UK BTR sector is still in its infancy, and yet to reach the same level of prominence as it has in other markets around the world, this recent growth is likely to continue, especially in the aftermath of Covid-19 with economic trends from the pandemic supporting the long-term prospects of BTR schemes. Historically, recessionary periods have traditionally been followed by phases of increases in demand for rented homes, as uncertainty and economic conditions stop consumers from buying new homes. Covid-19 has also triggered change in consumer priorities and expectations for their living environments.
“Before the pandemic, developers behind BTR schemes began identifying locations with high rental demand, designing buildings with useful and sought after amenities for residents, which are not available in traditional single unit homes, and offering onsite management, all whilst being a more affordable housing solution with more secure tenancies. When looking at this through the shadows of Covid-19, BTR schemes are providing solutions to the new lifestyle demands of renters.
“Covid-19 unexpectedly created the world’s most powerful-shared experience, with lessons and learnings about how we live, work and play, informing decisions in every industry globally. The uncertainty that Covid-19 introduced into our lives has seen consumers seeking more security and dependability, especially when it comes to housing. BTR schemes have institutional brand backing, which immediately offers a greater sense of security and reliability for renters. These schemes also offer more functionality for residents to live and work. With companies around the world moving towards flexible working models, BTR schemes are well positioned to support this trend. The majority of BTR schemes offer dedicated co-working amenity spaces and are located close to local facilities, allowing renters to shape their worlds around their homes, and benefit more from the local community feel of a BTR scheme.
“Through the medium and long-term, BTR is comfortably weathering the storm, and looks set to continue to rise with resilience provided developers are continually reacting and responding to changes in consumer needs and demands. Supporting this is the changes in consumer attitudes towards renting, and with the expectations and pressure for young professionals to become homeowners fading – the only way is up for BTR.”