By Franz Doerr, CEO at rental payment platform flatfair
As many Build to Rent operators simultaneously fashion themselves into cookie-cutter mirrors of one another – each offering a dazzling array of top-notch amenities and millennial-oriented decor – operators will soon find they have to dig deeper in order to stand out from the crowd.
Perceptive developers, savvy operators, and fiscally forceful institutional investors have recognised Build to Rent’s potential, as they look to address the issues a 21st Century renter faces, such as short-term leases and unscrupulous landlords.
The British Property Federation recently found the number of Build to Rent homes under construction or planned across the UK in 2020 had jumped by 22% when compared to last year.
It’s clear traditional letting options are now facing competition and, in some cases, becoming overlooked in favour of streamlined service-based living. New Build to Rent developments offer a host of benefits for renters who are keen to escape the confines of dogmatic contracts and wearisome ‘life admin’.
High-quality amenities and perks are being thrust upon an increasingly demanding market of young professionals, including on-site gyms, residents’ lounges, terraces, co-working spaces and flexible contracts. However, operators looking to streamline their offering even further must go beyond a 24-hour concierge, pet-friendly policy, or free cycle-storage – as sought after as these features are.
Stripping back initial and intimidating up-front rental costs, such as the traditional damage deposit, is the logical starting point. Some Build to Rent schemes already offer no deposit move-ins to prospective residents. Nonetheless, this can require pursuing insurance partners, devising the actual scheme, and budgeting for any wear and tear.
All of this proves costly and can potentially distract an operator from investing in services that initially attracted residents to the development in the first place. Innovative proptech firms such as payments platform, flatfair, offer alternative solutions.
On average, traditional damage deposits cost renters in London more than £1,500. However, in the case of flatfair and their ‘No Deposit’ solution, tenants can secure their new home with a small check-in fee worth one week’s rent (+ VAT). Tenants will then pay for any slip-ups, including damage, outstanding bills, or unpaid rent once their tenancy comes to an end.
Doing away with potentially eye-watering upfront costs appeals has been proven to make properties more appealing. Last month, we examined 2,334 property listings across 148 estate agent branches in England and found more than one-third (34%) of all properties had seen their rent values decreased amid the coronavirus pandemic.
However, of those listings that were offering flatfair’s No Deposit solution, just over a quarter (26%) had seen a reduction in rent prices – a difference of 24% when compared to listings that offered traditional damage deposits only.
For many years, developers and operators have been experimenting with technology that can help with their properties. This trend has never been as relevant as it is now.
As Build to Rent developments look to cater to the demands of ‘Generation rent’, they must also recognise that the bulk of their prospective tenants have been raised on a digital diet of instant gratification — from movie-streaming to online shopping. They will, therefore, be quick to embrace quick, transparent and straightforward innovations in the rental market.
Proptech firms like our own and the Build to Rent sector are, effectively, both pursuing the same goal – the simplification of renting. It should come as no surprise, then, that the next big strides in Build to Rent are accomplished hand-in-hand with firms like flatfair.