Director of Development and Projects at Casa by Moda explains the importance of the suburban Build to Rent model in addressing the UK’s housing shortages and delivering neighbourhoods that are fit to meet the shifting demands of renters.
By Matthew Townson, Director of Development and Projects, Casa by Moda
Across the UK, the nature of housing demand is shifting. We are now seeing reports emerge of house prices – which had risen for so long – starting to fall back. Increased interest rates have driven up the cost of borrowing, making mortgages more expensive and home ownership less affordable. It is clear these financial impacts are having a significant effect on the sales market.
In the rental market, we see the opposite. According to Rightmove, 23% more people are enquiring about rental properties vs the same period last year alone. Demand here – already strong and outstripping the supply of quality rental homes currently available – continues to increase. At the same time, we are also seeing the nature of this demand evolve, with resident expectations shifting towards modern, serviced and high-quality homes.
Rising energy costs are just one example of why renters are becoming increasingly concerned with their energy usage. When combined with more general concerns over sustainability and a desire to be more eco-conscious, this is driving more and more residents to place a greater emphasis on the environmental credentials of the homes they rent.
We are also seeing renter expectations shift when it comes to the wider communities their homes are a part of. Many residents desire a flexible rental living experience, but now also prioritise a suburban location, which provides access to green space and has a focus on health and wellbeing services. Renters are looking for neighbourhoods that bring people together and create genuine communities.
According to Knight Frank’s Suburban BTR Housing Report from 2021, over half of private renters in the UK are now choosing to live in suburban locations, and 60% of private renters already live in houses rather than apartments. The same report also found a significant factor that drives renters towards suburban homes rather than inner city apartments, was the effect of the pandemic – when more living spaces, home offices and outdoor areas became a priority. With suburban locations continuing to attract large numbers of renters, it appears that this is a trend set to outlast the pandemic and play an important role in shaping the future of the rental market.
These shifting expectations provide a real opportunity for the single-family Build to Rent sector. Much of the rental housing stock in the private rented sector is outdated, inefficient and low quality. There can also be a perception in the private rental sector of poor rental management, which can create sub-standard living experiences. In the single-family rental sector, suburban Build to Bent communities, such as Casa by Moda neighbourhoods, will help remove this risk for residents. Instead, there is a much greater focus on delivering high quality living experiences and services which suit a wide range of demographics, enabling positive, long-term rental commitments. With ESG credentials also increasingly scrutinised, there is a greater onus on being able to provide future-proof sustainable homes attractive to institutional investors.
This landscape helps explain why there is so much interest in the single-family Build to Rent model. It brings to the market an offering which is perfectly suited to the evolving demands of residents and – with rental demand so high – provides institutional investors with a compelling option to add to their portfolios.
It’s an exciting time for the sector. With a strong pipeline of developments in place across the country, and years of operational experience from Moda Living’s Build to Rent portfolio, Casa by Moda is perfectly positioned to take the lead in building the next generational of rental homes across the UK.