Steve Room, Head of Residential Development, Lee Baron
The 3rd PRS Forum showed that much has moved on in the Build to Rent sector since the inaugural conference in 2015. In this year’s forum, there was genuine involvement from registered providers, housing associations and local authorities – in some cases collaborating with commercial entities – to provide suitable Build to Rent developments, with the aim to open up the Build to Rent market to more participants, especially in London where there is a desperate need to build more homes. Businesses that have historically been focused on construction have also become involved in the Build to Rent market, including Kier Group which has around 4,000 Built to Rent apartments in the pipeline in the London area. And Lone Star’s Quintain development at Wembley Park, covering some 85 acres, is now committed to having 3,000 Build to Rent apartments under construction by the end of 2017, to be run by its “TiPi” brand. The PRS Forum also highlighted the interest from the USA and Canada to bring their multi-family housing experience to the UK market, from developers such as Lone Star, Greystar and Real Star.
A fairly new housing sector only a couple of years ago, Build to Rent has become a long-term solution for many, and is overtaking the traditional buy-to-let market. There are now a lot more Build to Rent developments available compared to three years ago, and the market is expanding regionally in response to the growing number of people who want to live in the UK’s booming regional cities, such as Birmingham and Manchester, and the increasing cost of buying there. The security and longevity of tenancy with Build to Rent developers and investors has shown to be a more reliable and long-term option for residents than the buy-to-let market - and developments are now occupied by an eclectic mix of residents, ranging from 18-year-old students to 70-year-old retirees. In some cases, there are now waiting lists for these desirable residences from tenants who do not wish to return to, or remain in, the buy-to-let market.
Traditional buy-to-let properties tend to be located on a residential street, surrounded by owner-occupied properties where there is little to no effort made to create a community. Meanwhile, the private rental sector has revolutionised the rental experience, incorporating modern design, communal spaces for socialising and an abundance of facilities so that residents have everything they need on their doorsteps. Developers of Build to Rent are beginning to understand what amenities their residents would like and the level of customer service essential to their tenants. This year’s PRS Forum reinforced the intention of providers to create a unique brand, looking to retain occupiers in their developments.
Technology is also key to keeping residents up to speed with the services and amenities on offer and how to use them. The data gathered will inform and educate developers and investors into further understanding what their residents want, as well as promoting a development as a great place to live, it increases the likelihood of retaining tenants and attracting new ones.
At this year’s PRS Forum, there was a heavy emphasis on social housing, estate regeneration and affordable housing, including the offer of discount market rent. Under new policy guidelines, the rental market has, in essence, been given its own affordable housing classification. Developers can offer discount market rent as their entire affordable housing contribution and all residents, regardless of income, have access to the same amenities and facilities.
The PRS Forum highlighted an absence of national house builders who, in many cases, have not yet incorporated Build to Rent into their model. However, I would not be surprised if national developers lend part of their developments to Build to Rent in the future.
The question on everyone’s minds upon leaving the forum was whether there is a risk that rather than massively increasing the number of available homes in the UK, we will simply shift the emphasis of new homes from Build for Sale to Build to Rent? This will certainly be a point to review at next year’s forum.