Generation rentIt is no surprise then that research by estate agent Knight Frank has revealed that the UK’s private rental sector (PRS) is expected to increase to £75 billion by 2025, with an additional 560,000 households anticipated to be in private rented accommodation by 2023. While general demand has increased, it is predominantly being driven by millennials and those aged between 35-45. With the average price for a two-bed flat in London now standing at around £1,450 a month, the rest of the country is seeing an influx of young professionals seeking to improve their standard of living, by relocating to cutting edge cities like Birmingham.
Flocking to new citiesBirmingham City Council is the single largest developer of new homes in the city, accounting for nearly a third of all new development. But with its population expected to grow by 200,000 people (90,000 households) between 2011 and 2031, a radical solution is needed to ensure affordable housing for the 25,000 households on the local housing register, as well as the London influx which is predicted to increase.
Is the BTR sector the solution we’ve been waiting for?Thankfully the rapidly growing Build-To-Rent (BTR) sector is putting itself front and centre to meet the challenge. For those not in the know, BTR homes are designed and built specifically for renting. Given the diverse needs of renters, a “one-size-fits-all” approach simply won’t work. Therefore, investors are typically adhering to the highest quality and standards for the homes they build, as failure to do so would result in unsatisfied tenants and unoccupied homes.
Trust and serviceChoice, longer tenancies, good local amenities, and transport links are just some of the reasons that renters are choosing BTR properties over those of traditional landlords. Equally important for them are trust and service.
Renter concernsThere were at least 101,614 complaints made against private landlords in England and Wales in 2017/18 – resulting in just 996 prosecutions. Renters are rightly concerned about irresponsible landlords, more focussed on short-term profits at the expense of health and safety and long-term relationship building. With BTR, investors are investing heavily in building reputable brands based on service and trust. Projects are built at scale, so standards are consistent, and are overseen by accountable, professional managers, drawn not just from the world of housing, but also from hospitality, in recognition that it is a service industry.
Next stepsThe myriad of stakeholders within the BTR sector working flat out to address the housing across the UK. Its consistent growth is a testament to the success of investors understanding the concerns of renters, addressing them through the provision of quality accommodation, and continuing to maintain a meaningful dialogue with tenants. What is needed now is greater collaboration between companies within the BTR sector to create a truly synergistic impact on the generation of affordable rental accommodation.
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