By Oliver Hazell, Senior Account Director at Cavendish
The Build-to-Rent (BTR) sector in the housing market is an optimistic one. This was clear as Cavendish colleagues, including myself, attended the Bisnow Build to Rent conference in mid-June in the shadow of Quintain’s coordinated, vibrant and mixed-use development sitting between Wembley Park tube station and a certain iconic national stadium.
Data for Q1 this year from the British Property Federation (BPF) about the sector only serves to prove the sector’s buoyancy justified. The BPF’s data shows that:
- The sector has grown by 28% in the past five years;
- The sector grew by 9%, despite build cost rises and labour shortages between Q1 2022 and Q1 2023;
- The number of BTR homes in construction is more than double in the regions of the UK what they are in London.
Despite a slowdown in the traditional for-sale residential market, compounded by rising interest rates, the BTR sector remains buoyant in a difficult economic climate. Existing PRS stock is beset by issues around poor-quality accommodation – damp, mould, and energy inefficient as examples – which is a problem that BTR does not have. BTR is purpose built, of higher quality, and built to EPC C or higher standards.
Two key themes came through strongly at the Bisnow Build to Rent conference:
- The BTR business model requires a focus on high occupancy rates and renters who stay for the long-term, this ensures that there is significant attention paid towards the needs and satisfaction of customers
Much of the conversation at the conference focused on how to create the best possible environment for residents to ensure they stay for the long-term in their BTR home or move to another BTR home if their work or personal circumstances mean they need to move location. This is different to some of the traditional Private Rented Sector (PRS) which focusses on a shorter-term basis on rental income.
The sector focused on this customer experience piece by learning lessons and taking ideas and inspiration from other sectors. This was reflected in one panel event on where the sector recruits their site staff and on-site management from – and it is largely the hospitality industry, rather than those with more direct housing management experience. Hospitality’s laser like focus on customer experience and customer satisfaction make it a natural fit in finding the edge in a competitive rental market.
- With the above in mind, does the tenure title ‘Build-to-Rent’ do justice to what the sector offers residents?
This question came up in a separate panel discussion and while ‘Built-to-Rent’ passes the Ronseal test for saying what it does on the tin, the sector is innovating and creating places that elevate the sector’s position. The quality of amenities, the relentless focus on customer experience and service, and the long-term approach taken by the BTR community therefore feels deserving of a more appropriate descriptor.
But what of the political perceptions of the sector? As a nascent sector in the housing market, it stands to reason that this newer tenure won’t be as well known by politicians across local, regional and indeed national government – particularly where politicians haven’t had applications for BTR homes in their areas.
On policy, the recently introduced Renters (Reform) Bill doesn’t make distinctions between different types of rented accommodation in the PRS, so the small landlord with one home they rent out is lumped in together with the institutional landlords such as the BTR sector. The aim of the Bill is to push standards up right across the sector which is laudable, but in doing so, the Bill misses key nuances within the PRS and conflates small landlords with larger ones meaning every part of the sector gets tarred with the same brush – something the BTR sector must work to change over the coming months and years as we approach a General Election and the Renters (Reform) Bill moves through Parliament.
It’s possible there hasn’t been much movement in politicians’ knowledge of the sector – so Cavendish are polling MPs on their perceptions of the BTR sector in a changing policy environment against the backdrop of the Renters (Reform) Bill – if you’re interested in receiving our report on MP’s perceptions of the sector, complete your details in the box below.
Please visit here to complete the form to pre register for the full BTR report: Build-to-rent: Still growing but with policy challenges on the horizon – Cavendish (cavendishconsulting.com)
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