Until recently, Build-to-Rent (BTR) in the UK formed only a small proportion of the wider Private Rented Sector, however it has grown rapidly as investors have moved into the market. It looks set to continue, given its resilience during these times of uncertainty, as highlighted by Watkin Jones last week. Despite the lockdown, BTR is continuing to function effectively for both investors and tenants, with the latter benefiting from the flexible tenancies, strong micro-locations and working from home capabilities offered by schemes. These aspects in turn provide security for investors, with Grainger recently reporting similar levels of rent collection for April 2020 (94%) and a higher proportion of renewals as tenants postpone house moves.
This picture contrasts with many other sectors which have seen the implementation of rent holidays or deferments. The divergence with other sectors does offer an opportunity however, as contracting high streets increase the importance of town centre regeneration. The BTR model is well suited to assist, helping to deliver much needed housing and bringing people back into the heart of towns and cities to support surviving retailers and reducing their environmental impact.
It offers a product that should be compatible with post lockdown normality, with central locations and secure bike racks enabling safe, socially-distanced travel to work places. Additionally, given the likely shift to flexible work patterns going forward, and the associated reliance on video conferencing, high speed WI-FI and communal working areas will be well received. Furthermore, whilst schemes typically offer a proportion of amenity space, operators have taken a pro-active approach, closing these areas, where required and offering a discount on rents to reflect these restrictions. They have also set up assistance committees to support those who have been made unemployed.
The result of these factors is likely to be improved public perception and increased attention from investors, giving both the practical benefits and responsible actions taken by operators.
Firstly, people want more flexibility on their tenancies – BTR puts the consumer first and offers a range of tenancies