Although it only accounts for a relatively small part of the private rented sector, Build-to-Rent (BTR) has been the fastest-growing part of the rental sector since 2016. Significant investment in the asset class continued in 2020 but how has the lock down impacted the BTR market?
According to the recent JLL Capital Markets Report, demand for the sector remains at an all-time high. Build-to-Rent resilience will depend on how long the current uncertainty lasts and the extent that political measures can dampen the economic slump. If the story remains positive, JLL anticipates that BTR will represent a greater share of institutional investors’ real estate activity.
These are definitely more than green shoots of recovery. According to the latest British Property Federation BTR map of the UK, there are now 157,512 BTR homes in the UK either complete, under construction or in planning. With almost half of these in the planning stage, it is clear that the desire for BTR schemes is still very much a going concern. According to Savills, the first quarter of 2020 saw a large number of Build to Rent homes completing across the country. The amount of completed stock increased 42% in the latest 12 months, the largest year-on-year increase since Q4 2018. This amounts to an extra 12,800 homes per year.
Demand may still be holding up, but how will developments look in a post-lockdown world? Even though the community element of BTR will be hampered by social distancing, operators are confident that they can adapt. Although amenity spaces are closed, operators are seeing a transition to virtual and video viewings and other tools that enable engagement with residents. According to Michela Hancock of Greystar in a recent Property Week panel discussion: “We also introduced a strong virtual suite of options, whether that be fitness, health and wellbeing, cooking challenges or book clubs. The same percentage of people that showed up in-person to events are doing the virtual events, which is pretty interesting.”
JLL’s research piece on the changes brought by COVID-19 illustrates that the priorities for renters have shifted. Broadband speed is now the second most important factor for the majority of renters when choosing a new home. With more and more people looking for remote working, the need for reliable, ultrafast broadband is even more pressing.
In a post-lockdown world, there will also be a move to become more digital from an operational point of view, which means more virtual concierge, more location-based services to help social distancing – generally, more tech. This is a trend that has already come to the attention of some operators. According to _PLATFORM’s Kevin Watson “I think the biggest change [we’ve seen during the lockdown] is video has become acceptable and the norm. On the maintenance point, if one of our maintenance guys had previously said: “We’re going to video call you to sort out a problem,” a resident would probably think “Why are you doing that?” But now they will probably think: “Yeah, that makes perfect sense.”
Research from the Royal Bank of Scotland forecasts that renters aged 35 – 44 will outnumber mortgage holders by 2029. Paired with an economic climate of economic uncertainty and rising unemployment caused by COVID-19, it is clear that for many, home ownership is not an option. Thus, Build-to-Rent will continue to grow at an exponential rate – and we need to make sure the technology is there to support it, especially in a more digital post-COVID world.
Developers and contractors have been experiencing site restrictions brought about by Covid-19 for some time. This coupled with a general reluctance for people to move house or change jobs are just a few reasons for caution. Lockdown will inevitably impact short-term profitability in Build-to-Rent. There may not be the same level of expected growth however, growth in this emerging market is still widely predicted.
Smart Fibre Infrastructure™ (SFI™)
Glide Residential’s SFI™ is a full fibre, landlord broadband solution that provides a fast and simple way to cable a building, specifically designed for the Build-to-Rent (BTR) sector. With SFI™, buildings are future-proofed for the next 25 years, as there are no restrictions on what can be delivered via fibre. SFI™ also enables the provision of many smart technology services such as Wi-Fi controlled lighting and heating, door entry, CCTV, digital signage, smart metering, and SkyQ. SFI™ helps add rental value, whilst reducing operational costs, and is designed with developers, landlords, and their residents in mind.
Managed Internet Service
With Glide Residential, you can also benefit from a fully managed internet service for private rented residents and fully managed internet solutions. Everything is managed from the cabling, to launch, to ongoing 24/7/365 support. Complete managed broadband services from a single provider. The network is monitored around the clock to ensure everything is running smoothly, and each customer has their own dedicated service manager as one single point of contact to provide everything you need.
Get in touch with a member of our team to find out how we can enhance your Build-to-Rent (BTR) development. Call us on 03333 800 800 or drop us an email at email@example.com, or find out more details on our website https://glidegroup.co.uk/connectivity-and-smart-solutions/sfi
No time to chat? Get a Quick Quote for your Build-to-Rent development here. https://glidebusiness.co.uk/sfi-quick-quote.