For many, being able to live in a good location, have great amenity on your doorstep, be near likeminded people and then not have to worry about maintenance or have large unexpected bills is a real positive. Elsewhere in the world, the private rented sector, driven by institutional investors is mature, but the UK (particularly urban areas) is catching up. Home ownership will undoubtedly remain the right choice for many but it is good to have a diverse mix of housing. And in many of our property hotspots where homes are in big demand, it provides a viable option to help solve the UK’s housing crisis.
Government is also trying to encourage build to rent from investors through the various changes in legislation, which, are drawn together in the housing white paper. According to Property week there are now 120,000 homes in development pipeline. As more small scale buy-to-let landlords leave the market, institutional investment in the rental sector is of key importance.
But could this change in tenure not only create a new exiting way to live, but also create better, higher quality, more sustainable homes?
Because those investing in the Build to Rent sector are thinking about the long term (think decades rather than years) they will have a longer term relationship with the building than developers who build to sell. The homes they build need to be desirable places to live in 10 years time, rather than just at the point of sale.
Designing and building homes that are desirable into the long term isn’t always easy, location is obviously of key importance, many developments will be designed to be car free, architecturally they need to be strong to keep up with that chic image. The actual homes themselves need to be well built, comfortable, efficient and sustainable
Given the fact that being in a good location and to be viable, often means building near a railway line (or other source of noise/ heat / air pollution) and at a higher density, actually achieving these design outcomes becomes more challenging. It is much easier to build a detached home on a greenfield site. Residential investors need to be aware of these challenges.
When looking at the long term, climate change must also be considered. Flats which people are unable to keep cool (or they might try and retrofit some sort of Air Conditioning) are unlikely to be easy to rent. Equally in winter, poorly designed ventilation systems that are difficult to maintain could lead to damp and mould. Renters want healthy, sustainable homes going beyond what the Code for Sustainable Homes prescribed. More information on high density homes can be found here.
Home Quality Mark (HQM) certification provides fund managers with the tools and reassurance to ensure that quality is delivered by developers to completion (not just at design stage). HQM Certification can then be used as a marketing tool, differentiating your homes from everybody else’s. It gives consumers more confidence and reassurances about the homes and communities they want to live and work in.
The Mark also has significant criteria around construction quality, aftercare and post occupancy evaluation (POE). This POE can help developers learn and improve homes for future developments.
People who live in BTR developments are often young and tech savvy, they use rating tools to help them decide which product to buy from mobile phones to holidays. Why would they not want to use one for the home they plan to live in?