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Quality is key to build-to-rent housing impact
Build-to-rent can offer a viable solution to the housing crisis as long as building standards don’t slip, says Jeff Maxted
The build-to-rent sector is growing rapidly, and shows little sign of letting up. With a recent study by the British Property Federation predicting population growth of around 9.7 million between 2014 and 2039, the demand for housing in the UK will only increase.
To unlock the full potential of this sector to transform the UK’s housing supply for the long term, there needs to be a bigger focus by developers, investors and social landlords on the quality of design and materials used, as well as the life cycle of properties.
Rented homes were traditionally a provision of local authorities and housing associations. The build-to-rent sector now appeals to a much broader group – including government, developers, proxy companies and investors – which are attracted to the quicker potential return on investment compared to the traditional housing sector.
It’s a steep learning curve for anyone investing in build-to-rent due to the criteria that need to be met to ensure schemes are of a high quality. This includes the requirement for professional management services, with fast customer service responses increasingly expected by tenants. It’s unlikely that we’ll see a full uptake of facilities, amenities and services across the board in the UK rental market. Build-to-rent is not a one-size-fits-all solution, and developers will need to carry out extensive in-depth research into the type of product that will best suit the location and target tenant.
The private rented sector has become accessible to almost everyone, from younger generations to older people, the latter who require easy access to certain facilities. As more developers, companies and investors show an interest in build-to-rent, the quality and standard of the end product will become increasingly crucial for attracting tenants, with enhanced choice in the market enabling them to shop around.
There is a danger build-to-rent will be viewed as a quick money-making scheme with low-cost and non-durable components being used, leading to problems further down the line as life cycle and maintenance costs exceed expectation.
A significant amount of work has already been done to combat this risk to the quality of build-to-rent schemes. The build-to-rent guides published by the Urban Land Institute UK Residential Council provide best practice guidance for developers around life cycle performance and quality of build-to-rent properties.
“There is a danger build-to-rent will be viewed as a quick money-making scheme with low-cost and non-durable components being used.”
The success of this sector relies not only on the quality of materials used, but also on the space itself and transforming it into a community. Much has been done already around the quality agenda of build-to-rent, but the question now will be whether the UK market can succeed in meeting this across the board. Established developers recognise the need for a high-standard product, but there may be cases in the smaller end of the rental sector where quality is not a priority.
Developers, investors and social landlords entering the build-to-rent market must consider the life cycle performance of the building. They should not be blinkered by a fast turnaround, and ensure that the materials used are robust and of a good quality, so that the property won’t be subject to huge maintenance costs or fail to perform as anticipated. High-quality materials will help buildings perform for the longer term and create a successful build-to-rent market that is fit for purpose and can offer a viable solution to the current UK housing crisis.
Jeff Maxted, director of technical consultancy, BLP Insurance
