Build to Rent residents less convinced on value

With Value scoring lowest in HomeViews’ latest report, CEO Rory Cramer unpacks the key reasons behind these lower scores.

Tall buildings where residents score value in developments - HomeViews | BTR News

The HomeViews National Build to Rent Report 2021 showed that the UK’s Build to Rent tenants are the happiest in the UK. However, of all the metrics that HomeViews ranks using verified review data, Value was the lowest-scoring for the second year running. Co-founder and CEO of HomeViews – Rory Cramer – unpacks the key reasons behind these lower scores in what is the UK’s highest-rated type of new build housing.

By Rory Cramer, CEO, HomeViews

Here at HomeViews we get the interesting job of analysing tens of thousands of resident reviews. We get the inside scoop on how well the UK’s new build property market is performing from the resident perspective – and it’s pretty positive overall.

Build to Rent top

Build to Rent performs especially well. Using data that now covers almost half of the UK’s completed developments, we have consistently shown that Build to Rent residents are the happiest new build residents in the UK. Private tenants in new build schemes rate their homes higher than owners, but Build to Rent residents rate their homes higher than both – across every metric that HomeViews measures.

The happiest residents rave about the hotel-like facilities, outstanding building management and the sense of community in their buildings. They love the modern design, the central locations and the flexibility of their contracts. But there is one area they aren’t as fully convinced about: Value.

The Value problem

Our 2021 Build to Rent Report showed that the average Build to Rent score for Value was 4.08 out of 5. Not a bad score at all, and higher than BTS tenants’ Value rating, but still by far the lowest of all the Build to Rent metrics that residents rate on HomeViews. And this was the case for the second year running. So, why is this?

Developments tenant scores showing Value as the lowest - HomeViews | BTR News

Facilities?

Our data showed that the three facilities that correlate most strongly with higher Value scores are a concierge (6% higher), a resident events schedule (4.3% higher) and swimming/spa facilities (4.2% higher). Gyms are also popular with residents, many of whom see the inclusion of an onsite gym as a cost saving over private gyms and also a major convenience.

Lockdown?

Lockdowns saw the closure of many Build to Rent facilities and events programmes. So, was this to blame for low Value scores?

Data for the 2021 Build to Rent Report was drawn specifically to cover the main lockdown periods of 2020, giving a unique glimpse of that most challenging year. A number of reviewers commented on their facilities being closed and events not taking place during lockdowns. Some suggested that rent freezes or reductions were appropriate – and some operators did follow suit.

However, Value scores actually increased slightly between 2019-2020 (3.99 / 4.08 out of 5). This suggested that lockdown was not a significant factor in the overall lower Value scores, and many reviewers expressed support for operators closing facilities during that time.

Location?

Location was the highest-rated metric for Build to Rent developments in our report – at 4.56 out of 5. Developers are clearly getting this aspect right, and residents are rating them accordingly.  

The report did show that regional developments achieved slightly higher average ratings than London schemes when it came to value. There was also a stronger correlation between value and overall star rating for regional developments than for those in London, suggesting that value for money is a higher priority outside the capital.

Value tenant scores and regional split - HomeViews | BTR News

However, good design and apartment size were consistent themes mentioned by reviewers who rated their developments highly for Value – especially in central locations, as this Manchester resident states:

…huge apartment space for city centre so excellent value for money in that respect. Verified Resident on HomeViews, Aug 2020

Price?

Our latest report also included a list of the 10 highest-rated Build to Rent owners/operators and developments for Value scores. This showed that perceived value was relative, with luxury high-end schemes as well as more standard developments featuring in the list.

10 highest-rated Build to Rent owners:operators and developments for Value scores - HomeViews | BTR News

Taking joint first place on the list was 10 George Street (Vertus) and The Quarters Kilburn (The Quarters by Bravo). 10 George Street offers residents a luxurious lifestyle in the Wood Wharf district of Canary Wharf, while The Quarters Kilburn is a more modestly-priced development consisting of self-contained studios. Service standards for both clearly exceed the expectations that residents have, and reviewers highlight the way that living there makes them feel:

10 George Street feels special. You’re made to feel special, and way before you even move in. Verified Resident on HomeViews, 10 George Street by Vertus, July 2020

The team and especially the landlord are like my family now. Verified Resident on HomeViews, The Quarters Kilburn by Bravo, July 2021

Reviewers of poorly rated schemes for Value mentioned regular rent rises that detract from their sense of getting good value. One resident said the rises felt “unjustified given the issues with the building.” Clearly, standards must meet the exceptional level promised by ‘Build to Rent lifestyle’ marketing in order to justify any higher costs. Many reviewers expressed their frustration at falsely inflated claims from operators:

this was presented as “an alternative to buying a house”. In what world would yearly rent increases be preferable to buying a house? Verified Resident on HomeViews, Sept 2020

Proving the Build to Rent case

While perceived value may be relative to price, many Build to Rent residents who commented negatively on value for money did directly compare their costs to those for homes in nearby areas. It appears that the extra services and facilities offered in Build to Rent schemes are not always convincing residents that the higher associated costs are providing good value, as this review illustrates: 

The building management staff are incredibly friendly and attentive and prompt whenever we’ve needed them. Overall, however, the value for money is poor, as you can get a 3-bed house with a garden for the same price in areas that are a similar distance to city centre.

We often see reviews that indicate that the benefits offered by Build to Rent schemes can also become their biggest detractors when not managed carefully.

For example, inclusive bills and council tax offer convenience, but can also make the monthly payments taken from residents appear inflated above other local rental prices. We’ve also seen plenty of reviews from residents who have struggled to query sky-high energy bills thanks to their all-inclusive package – detracting from the convenience these packages are intended to provide.  

Managing expectations

One of the most common complaints we see across negative reviews for both BTS and Build to Rent new build homes is that residents feel that developers have ‘oversold’ their homes and under-delivered.  

We see that Build to Rent developments offering residents good value are succeeding in meeting the lofty expectations promised by this type of home. Management teams are friendly and respond swiftly to problems, events programmes generate a sense of community and homes are spacious and nicely designed. Residents are made to feel special.  

Where residents feel they are not getting good value, we usually see a failure on some level to meet high expectations. Residents appear happy to pay more, but they need to clearly see everything that extra cost buys for them.

Expectations need to be met or exceeded for high Value scores like those of our 10 highest rated. For these, phrases like ‘dream apartment’ and ‘ultimate rental experience’ are regularly seen in resident reviews as well as in the marketing materials.

Download your free copy of the HomeViews National Build to Rent Report 2021.