In the United Kingdom's real estate market, the Build to Rent sector has emerged as a transformative force in recent years, drawing plenty of attention from commercial property managers, property developers, and property investors as a viable, long-term opportunity.
The reason is that Build to Rent (BTR) represents a contemporary approach to residential development that gels with the needs of people. Unlike the traditional real estate landscape, where homeownership has been seen as the ultimate goal for many professionals, BTR takes a unique approach with its intentionally designed properties constructed and managed around a guiding purpose – community. The focus of BTR typically zeroes in on creating a vibrant, community-centred way of life that speaks to the needs of a diverse group of people, both young and old, and from all walks of life.
As such, the significance of the BTR sector in the UK real estate market cannot be overstated. When executed correctly, in the right areas, and at an appropriate scale, BTR can be a legitimate answer to the seemingly ever-present challenge of a housing shortage, which governments past and present have attempted to tackle after setting lofty targets.
In short, with the rise of urbanisation and drastically changing lifestyle preferences, plus the demand for flexible, high-quality accommodation, BTR developments provide a much-needed solution for a country that is, as claimed by many, in the midst of a housing crisis.
The rise of Build to Rent in the UK
Build to Rent in the UK has undergone a remarkable evolution. Although the concept is much older, in the UK its roots can be traced back to the early 2010s. While previously, the UK's housing market was primarily focused on owner-occupied properties, BTR introduced a novel concept – purpose-built, professionally managed accommodation. This was ultimately viewed as a response to the increasing demand for high-quality, well-managed housing options, especially in urban centres.
Back in 2012, the UK Government floated BTR as a response to the findings of the Montague review, an objective of which was to distinguish professionally managed, large-scale, and institutionally invested rental housing from the broader private rented sector.
Ian Fletcher, director of real estate policy at the British Property Federation (BPF), a nonprofit membership organisation representing companies involved in property ownership and investment, said: “There were a number of local authorities in the UK that grasped the needs that they saw in their local housing market,” and that there existed “an appetite to look at something that would deliver for younger people who can't access government-supported housing and equally can't buy their first home.”
The Montague review identified substantial potential for investment in the large-scale construction of homes exclusively designed for private rent, with professional organisations taking the lead.
It emphasised that, with the right market conditions and supportive public policies in place, BTR could become an indispensable source of housing stock, complementing the more traditional housing sectors.
Since then, the BTR market in the UK has become a flourishing sector, as evidenced by The British Property Federation, which issues a quarterly report on Build to Rent. The most recent covering quarter 2 of this year revealed that there are now 253,402 Build-to-Rent homes in the UK. From that total, at the time the report was published, 88,100 were complete, 53,487 were under construction, and 111,815 were still in planning.
Perhaps unsurprisingly, 97,294 of the units are in Greater London, with 156,108 units outside the capital.
Technology’s role in successful Build to Rent Management
With the rise in Build to Rent properties, there exists an opportunity to start off on “the right foot”, so to speak, and ensure that they are managed effectively from the outset. From the tenant experience to maintenance and community-building to compliance, technology and innovation in property management represents the best path forward.
After all, the evolution of the BTR sector into a distinct category of high-quality rental offerings has been partly inspired by the hospitality and multifamily sectors in the United States. This shift towards a premium living experience means that it is vitally important to maintain the property and its shared facilities for the safety of occupants and regulatory compliance for the businesses and individuals that own or manage them.
Keeping facilities in impeccable condition and ensuring that lifestyle amenities like pools, gyms, and communal spaces are consistently operational and safe is paramount. Failing to keep them tip-top will limit the appeal of BTR more broadly at a market level while also posing safety hazards and risks at the property level.
Safety is a critical aspect in any property class, but with recent updates to the Building Safety Act, especially around shared facilities like elevators and other communal features, paying attention to things like fire safety regulations and the structural integrity of the building has never been more crucial.
Tech solutions, therefore, can and will play an integral role in adhering to these safety measures and in meeting regulatory requirements, too. Property owners must navigate the complexities of rules and regulations around inspections, fire risk, hygiene, and more, to avoid legal repercussions or worse. The best chance of staying on top of these complexities is by bringing technology and innovation into the frame to do some of the heavy lifting.
Technology and innovation in property management
We know that technology has been increasing in importance in property management over recent years. These same solutions can be applied to BTR properties, too, simultaneously streamlining operations and enhancing the tenant experience.
Modern property management platforms offer tools for lease administration, rent collection, maintenance tracking, and communication, making it easier for property managers to maintain BTR properties efficiently. In addition to this, integrating smart building technologies – as they are also growing in popularity – can improve tenant convenience and reduce operational and utilities costs.
As we’ve covered, fire risk is in the spotlight due to the Grenfell tragedy. While Grenfell was not a Build to Rent development, there were significant failings in the shared facilities of the building, thus the fallout from this event led to amendments to the Building Safety Act and Section 156.
The amendments set out a range of duties for responsible persons, including the need to:
- Complete a fire risk assessment in full (where previously it was only necessary to record specific information)
- Record the name of the individual and/or organisation who instructed the undertaking/review of any or all of the fire risk assessment
- Record the fire safety arrangements (demonstrating how fire safety is managed on the premises)
- Investigate, identify and make contact with other responsible and accountable persons who also have duties in the same premises
- Share all relevant fire safety information in the event of having to transfer responsibility to another party
- Provide the residents of any building containing two or more sets of domestic premises with relevant and understandable fire safety information
The future of Build to Rent
The Build to Rent market stands out for many reasons, not least for the promise it holds to deliver on housing stock at a time when it is so desperately needed, but this ever-evolving sector is continually being reimagined, reflecting its dynamic nature to respond to the needs of people up and down the country.
As such, the future outlook for the BTR sector in the UK is one of growth, innovation, and continued adaptation to the changing housing landscape, so property managers, BTR owners, and property investors should similarly be dynamic and agile, embracing technology to ensure all bases are covered at all times, whether that’s inspections and reporting for compliance and regulatory needs, or to deliver on the desired tenant experience and community aspects offered by the Build to Rent concept.
To see how we can help you manage, maintain, and protect your Build to Rent property, book a demo today.