By Richard Morris, Director at technologywithin
The UK Government’s 10-point plan for a green industrial revolution has prompted new conversations on increasing sustainability across our economy, and the Build to Rent sector is no exception. While the UK aims to reach net-zero emissions by 2050, at current a staggering 19% of the UK’s greenhouse gas emissions come from heating the places we live and work, with residential buildings accounting for over three-quarters of this even prior to calls to work from home during the pandemic.
As we approach a greener economic recovery, now is the time for Build to Rent landlords and investors to consider putting sustainability at the heart of their buildings, future-proofing their portfolio and attracting tenants for the decades to come.
Smart investment for future-proof assets
In an ever more saturated rental market, cutting-edge technology and green infrastructure can no longer simply remain a nice-to-have for Build to Rent properties. Point seven of the UK Government’s 10-point plan captured just this, calling for greener, warmer and more energy efficient homes.
So, not only is the energy efficiency of a building an ever more crucial selling point for more environmentally and cost-conscious tenants, it is also an imperative for landlords looking to future-proof their buildings in line with a more sustainable agenda. Integrated energy systems can play an important part in this effort, as well as offering more effective and responsive option for tenants looking for control over the quality and costs of their living space.
Smart sensor technology can also have an important bearing on this. For instance, movement sensors can help to control energy distribution across a building in real time, ensuring that power for lighting and heating rooms is only being consumed in parts of the property where someone is present. Artificial Intelligence and self-teaching algorithms can also help to this end, adjusting heating output according to metrics like tenants’ routines, weather conditions or the use of other power sources – such as an electric fireplace or oven.
Furthermore, not only can smart PropTech solutions help to minimise emissions, they can also better monetise the tenant experience by delivering a more responsive, higher quality rental product. Air quality sensors, for example, can aid in monitoring for issues such as damp or leaks, mitigating against the long-term impacts of indoor air pollution by catching issues at the earliest stage. This, in turn, can reduce maintenance overheads through early identification, as well as increasing retention rates by empowering tenants with a more responsive living environment.
While this year has seen the UK Government announce its agenda for a more sustainable economic recovery from the coronavirus pandemic, it has also seen tenants’ needs and preferences change in ways that were unimaginable just 12 months ago.
Whereas, before the pandemic, employees were tied to homes within commutable distances of central offices, a more agile and footloose approach has seen rents rise by as much as 5.5% year-on year in the countryside. So, as working norms change, so too are expectations – and connectivity is at the heart of this.
Even prior to Covid-19, a report commissioned last year by WiredScore Home and the Home Owners Alliance found that 85% of people faced WiFi connectivity issues at home, with those affected forced to use on average 2.5GB of extra mobile data to compensate for this each month. In fact, over a quarter of respondents said that, had they known about the connectivity issues beforehand, they would never have moved into the property. For Build to Rent landlords, this is the difference between retaining and losing a tenant – and facing reduced yields over void periods as a result.
Now, with the pandemic prompting as many as 61% of desk-based workers to say they would like to work from home more in the future, connectivity is only likely to rise on the priority list for tenants. Already, over two-thirds of landlords reported that good digital connectivity allows them increased yields, while 56% reported longer tenancies as a result of robust internet access. So, for landlords looking to attract tenants in an ever more saturated market, the appeal of high-quality technology infrastructure is clear.
Looking to the future
While Build to Rent schemes have broadly been built in line with more modern building specifications, this does not mean landlords should take a complacent approach towards preparing for the future. Technology will be at the heart of this, ensuring that buildings continue to evolve in line with a growing sustainability agenda and changing tenant priorities.
Those that fail to recognise this face the risk that their buildings become obsolete and unattractive, failing to offer the connectivity required for post-pandemic living, or the sustainability infrastructure to ensure their portfolio is truly fit for the future. For those that embrace technology now, the horizon looks very positive indeed.