The first wave of purpose-built rental accommodation – by professional landlords – has raised the bar…
By Sarah Tonkinson, Managing Director – Institutional PRS and Build to Rent, Foxtons
It was not so long ago that the Build to Rent market was practically non-existent in the UK. In fact many people, even within our sector, still are not fully aware of the rental revolution quietly spreading across our cities. Admittedly the UK was a late arrival to Build to Rent, but as we witness an unprecedented surge in demand for rental properties it is time for the industry to take notice of these new entrants that are setting the standard for long-term rental residences.
In London, which has seen landmark developments in places like Tottenham, Croydon, Wembley and Stratford, renters have voted with their feet and rushed to rent one of these 30,000 homes. Whilst it is a sector still in its infancy, less than 1% of rental property in the UK is Build to Rent, it has huge potential and is expected to more than double in size by 2025, with further growth through to 2030 and beyond.
It is a common misconception that today’s ‘generation rent’ are all desperate to become ‘generation buy’. Undoubtedly house prices have forced more people into rented accommodation, but growing numbers of people are choosing to rent as a lifestyle choice because of the convenience and flexibility it offers. Build to Rent will accelerate this trend.
Whilst amenities vary across developments, with swimming pools, cinemas and roof terraces at the top end properties, at the heart of the Build to Rent proposition is an unrivalled level of service akin to top hotels. Customers are commonly called residents or guests rather than tenants, and on-site concierges mean that property maintenance, so often the bane of many a renter’s life, is handled more quickly and efficiently.
Community really matters to this generation of renters, something that is impossible to achieve in standalone rental properties. More than half of Build to Rent schemes in 2021 have been built with purpose-built spaces for socialising, meeting or even where parents and children can supervise homework! This might not be for everyone, but it certainly does cater to the burgeoning 25-34 generation rent demographic.
In the fast-growing rental market this need not be at the expense of private landlords who will remain the main providers of rental accommodation in both London and the UK. But there is much they can learn from the new professionalisation that Build to Rent has brought to the market. I am not suggesting that private landlords should start digging swimming pools in shared gardens. The best way they can compete with the high bar set by Build to Rent is to provide impeccable service, maintain constant communication with tenants and be willing to offer greater flexibility on things like pet ownership and tenancy length. There is room for everyone in this market, but traditional landlords need to keep an eye on the new guys in town who are setting the bar high.