By Lesley Roberts, Partner at Allsop
The Build to Rent sector is traditionally associated with modern living spaces designed to cater to young professionals, but those familiar with this product will know that this one demographic is just the tip of the iceberg. Build to Rent can offer something to everybody; the key is ensuring that we keep a close eye on what potential consumers want. In order to achieve that, we need a diversity of voices within Build to Rent itself to help steer it in the right direction and increase its appeal to as many tenant types as possible, while being sensitive to their needs.
Over the 10-year history of Build to Rent in the UK, it has become clear that this product type has the potential to appeal to a wide range of people across all age groups and occupations, as well as geographical locations.
In the early days, the sector was broadly thought of as high-density units, let and managed under one roof, set in urban areas that would mostly cater to the younger generation of working professionals. For many, living in a Build to Rent scheme was seen as a steppingstone towards property ownership, with the benefit of shared amenity and convenience. Suburban Build to Rent remained under the radar as the investment returns and proof points were scarce.
What the industry has discovered over time is that while urban Build to Rent properties have, in the majority, attracted a younger audience, the concept itself was of interest to a much wider pool of tenants than originally anticipated. Just like home ownership, renting has a number of advantages, offering flexibility and often allowing people to enjoy an enhanced lifestyle they would otherwise struggle to afford. Another advantage of Build to Rent is that it allows people to experience the desired lifestyle there and then, without having to save and live on a tight budget for years, which can be frustrating, especially now with interest rates at historic lows.
The good news is that over the past decade, consumer and investor attitudes towards Build to Rent have evolved, and we’re now seeing a strong focus on family focused developments across the country. A good example is Goldman Sachs’ recent £150m milestone purchase of the Gatehouse Portfolio, which signalled the depth of appetite in the market for investment into regional residential assets. Legal & General’s launch of a dedicated Single-Family Housing business using its own funds is another example of the strength of sentiment for investment into regional family housing.
The case for regional residential investment had been bubbling along even prior to the pandemic. Today, the housing crisis and desire for good-quality rental accommodation at a reasonable value point continue to be the driving force behind the uptake of Build to Rent homes. But these are not the only drivers. Since the onset of the health crisis, there’s been more demand for outdoor space, community element, facilities and service, build quality and value for money, all of which the sector can provide.
Despite the positive trends on the demand-side, we should not be resting on our laurels. In order to keep on top of consumer preferences we need to be constantly sharing insight and learning, ensuring our sector is representative of the people it’s catering to. Without diversity of thought and perspective within it, Build to Rent will start to lag behind and ultimately fail.
We need to focus on bringing in more voices that would help developers and their partners to create the right kinds of homes and facilities, challenging the deeply ingrained perception of Build to Rent being all about apartments in high-rise blocks for 20-something professionals. To determine what makes the perfect home for any given demographic, we need to ensure we’re speaking to those very people, and that decision-making in Build to Rent is based on discussion, collaboration and diverse perspectives from a wide range of individuals, not just a small group of people from similar backgrounds.
Diversity of thought and varied input from life experiences bring colour and perspective to the development, investment and management of Build to Rent. The more we understand the people we provide homes for, their priorities and living preferences, the better we can be at creating and delivering spaces where they can feel at home.