The build to rent (BTR) sector may still be in its infancy, but it is taking the UK by storm. With the lettings market under immense pressure as a result of increased demand and inadequate supply, BTR is a welcome addition to the property landscape. So welcome, in fact, that the BTR sector is experiencing accelerating growth, with the British Property Federation stating that the sector is growing by a huge 20% each year. If you are unfamiliar with build to rent, or there are no BTR developments near you, the chances are this will change very quickly with the upcoming development pipeline of over 77,000 new BTR homes currently in planning.
What Is Build To Rent?
Firstly – what is BTR? BTR is an acronym for Build To Rent, a form of rental development wherein each unit is constructed to be rented rather than sold to independent landlords. The building is usually owned by an investment or pension fund which then benefits from the rental income on the units. This creates a development where all units are run and managed by a centralised authority rather than a collection of different landlords, or a combination of landlords, tenants and homeowners, thereby creating a sense of equality and removing some of the friction that often arises from various parties being responsible for one building. As they are such a new format, BTR developments tend to be extremely modern and often include a range of impressive amenities in order to appeal to as many prospective tenants as possible and attract premium rental values.
Why Is BTR So Popular?
BTR Communities
Although privately rented properties can foster a wonderful sense of neighbourly kinship, community is part of BTR’s DNA. The sense of equality that comes from a congregation of all-renters being in the same building rather than a mixture of owner-occupiers and tenants, paired with the ample opportunities to spend time in the development’s accessible communal areas, creates a sense of togetherness. This is amplified by the standard long-term tenancies in BTR developments, as well as the many community initiatives that are pursued by property managers – from movie nights to coffee socials and gym classes, there’s always an opportunity to meet and befriend your neighbours.
BTR Offers Long-Term Tenancies
Whereas the standard tenancy length options for PRS properties are between 6 and 12 months, BTR tenancy lengths are much longer, thereby providing a sense of security that may not be available in PRS units. There is no threat that your landlord will serve you notice to move back into the property or list the property for sale, as BTR schemes are designed to be rented and not purchased by private landlords. With tenancies available for 36 months for 92% of BTR schemes, tenants are afforded the opportunity to settle into their new homes without disruption, improving their overall experience.
Premium Amenities
One aspect of BTR developments that sets them apart from privately rented properties is the inclusion of amenities which offer a premium feel, can justify higher rental charges, and can optimise convenience for tenants. The most common features in these schemes according to the British Property Federation are:
- Social Events (88% of BTR developments host these)
- Concierge Service (85%)
- Communal Outdoor Space (81%)
- Parcel Acceptance (79%)
- Lounge (78%)
- Co-working Spaces (73%)
Most of these features are centred around the idea of convenience – rather than walk to a local café to work, there are co-working spaces. If you require some fresh air, or a place to take your dog, you needn’t go to the park when there’s ample space on your doorstep. There’s no need to worry about being in to collect deliveries when your concierge service can accept them on your behalf… BTR schemes are designed to make life easier and more convenient with the inclusion of useful amenities.
Who Rents With BTR Developers?
BTR developments are most popular with those in their 20’s and 30s’s according to the latest research by the British Property Federation, with 40% of tenants being in this age bracket. However, this is a similar percentage to those living in PRS – the most distinct difference is the number of those between 18 and 24 that choose to rent via BTR schemes is far higher. This is most likely due to the convenience factor which makes adjusting to independent living far easier, and the similarities with student accommodation that can provide familiarity after university ends. After living at home or at university, BTR schemes can provide a good stepping stone to independence whilst maintaining some features that can make moving out less daunting, such as social events and concierges to help you settle in. Other than the large number of younger occupants when compared to PRS, BTR developments are utilised by a range of tenant groups – from families to couples, young tenants to middle aged tenants, convenient living features and a sense of community are deemed valuable to any demographic.
Is BTR Better Than PRS?
BTR schemes certainly fill a gap in the rental market that the private rental sector cannot fill on its own. BTR properties can offer so much more than PRS properties in terms of the range of amenities, long-term tenancy security and premium features which many tenants may be looking for. However, BTR may not be right for every tenant – for those looking for shorter tenancies, and who may not be interested in included amenities such as gyms and cinemas, PRS properties may be a more suitable option. In the current market, BTR developments also tend to be significantly more expensive to rent than private rental sector homes, meaning that they may not be accessible for the whole of the market – it is expected that this could change over the coming years as the build-to-rent sector becomes more saturated and competitive.
Is BTR right for you?
Centrick’s dedicated team of build to rent experts are here to help you make sense of the quickly developing BTR landscape. That’s why we’ve created VICI by Centrick, a comprehensive service that spans from development marketing, to tenant acquisition, to building management and maintenance, and everything in between, to make the execution of your BTR scheme as streamlined as possible. For more information on how VICI can bring your BTR vision to life, contact us via the form below:
