The landscape of the fast-developing Build to Rent market is now truly beginning to reveal itself and, done well, it is our belief that it holds nothing but good news for investors and tenants alike.
Success in this emerging asset class relies upon careful consideration and planning; a process that starts at the very outset when choosing a location, and runs throughout the entire design and implementation of a new development.
The funders, who are set to become some of the UK’s largest residential landlords, are now fully embracing this. Rightly so, they are engaging with operators who will help them extract optimum long-term returns on their investments.
But equally important is the increasing realisation that every BTR scheme must have real substance, not just style. It is crucial for both investors and operators alike to understand that tenants will soon see through a building that hinges on hype and frills, without actually allowing them to live in the way they want.
Recent research reveals that tenants are drawn to practicalities, such as excellent management and maintenance services, generous parking facilities, ample storage and high quality furniture and fittings. These all outweigh the “Hollywood” amenities like gyms, cinema rooms, dog walkers and hotel-style concierges. The message is clear: get the basics right, please, even if the more glamorous services might attract headlines and higher rents at the outset.
The great news is that the ability to deliver this successfully lies within the control of those responsible for designing each new scheme. Planning, preparation, first-hand knowledge and experience of how tenants interact with their homes will be vital.
This is precisely what the consultancy function of our BTR management business, Smart Living, is currently focusing on helping to deliver. Investors are safe in the knowledge that it will serve their best interests long after their development is no longer the shiny new kid on the block. And the benefits of this advice are already being enjoyed in the BTR schemes we currently operate.
With great power comes great responsibility, so the mantra goes. Tenants now fully understand what the BTR market will potentially mean to them, and it’s up to those of us involved in defining it to make sure we don’t sell tenants short in the pursuit of quick gains. Instead, we must plan carefully for tenants’ long-term enjoyment of their homes.