Despite ongoing challenging market conditions, a series of recent roundtables with leading build-to-rent (BTR) investors and developers indicated that there was some optimism and a chance to be upbeat around the future.
With representatives from both single and multi-family housing, the lively debates uncovered a number of key takeaways…
Sustainability - The struggles of biodiversity net gain on greenfield sites as buying credits are hard to find or very expensive. Yet some are benefiting from the use of biodiversity net gain and landscaping as it is seen as a positive in achieving higher rents. There is also a current disconnect between investors and developers in terms of infrastructure. For SFH, investors and planners are more frequently looking for 100% air source heat pump schemes, yet often, the lack of localised infrastructure is hindering this goal. Even with the current sustainability push, a number of developers are still only able to build to EPC B ratings as the cost to increase to an A rating renders schemes incapable of delivery.
DMR rent caps - It was widely discussed that a number of attendees are finding it difficult to incorporate affordable units at the current DMR caps. It was anticipated that these would increase in 2023, but hopefully, it will be imminent to enable the greater delivery of affordable products.
Gateways - The introduction of Gateway’s 2 & 3 during the construction phase raised major concerns over the impact of costs due to the significant waiting times. This has led to developers wanting assurance on how long the Gateway process will take to ensure the buildings can be tenanted at the earliest opportunity.
Planning Challenges - There have often been challenges within the planning system, but recently, those in the room have had several issues in terms of consistency. Most notably with different design officers coming in throughout the pre-app stage, each with their own requirements that do not seem to align with previous advice.
One thing that was clear throughout was the need to work collaboratively to design and build safe buildings which are still viable and investable.