Instead, the research highlights that BTR is home to a diverse mix of residents and ‘is making a crucial contribution to housing need in both urban and suburban areas’.
Now in its second year, the Who Lives in Build-to-Rent? report from the BPF, Dataloft, London First and the UK Apartment Association (UKAA) analysed 89 schemes in England totalling over 20,000 residents in more than 15,000 homes – making it the most representative study of the BTR market to date.
The urban component of the data, constituting 15,887 residents and 12,404 homes across 49 schemes, found that BTR actually has a similar resident profile across income, profession, age and affordability to the traditional private rented sector.
Incomes for BTR residents are broadly similar to those in the PRS. For example, in the urban BTR sample, some 32% of residents earn between £19,000-32,000 per year and in the PRS it stands at 37%.
What does affordable actually mean?
The problem with affordability is that no-one can actually agree on what it means, which makes quantifying what makes a home affordable a tricky task.
According to the Office for National Statistics (ONS), housing is considered to be affordable if tenants spend 30% of their income on rent.
The research suggests that monthly rental costs for couples and sharers living in BTR sit at 30%, aligning with the ONS’s affordability benchmark, compared to 33% of monthly income in the wider PRS.
For single renters, meanwhile, the research suggests BTR is on average fractionally more affordable than the PRS at 32% of monthly income versus a third (33%).
The study also argues that BTR doesn’t just provide residents with a home for their monthly rent payment, with 78% of schemes in the urban data being home to a roof terrace or shared garden, 73% having a concierge and social events, 69% including parcel acceptance and storage, and 61% playing host to a co-working space.
The research found that, across the urban data, nearly one in five renters (18%) living in BTR schemes are public sector workers. Meanwhile, both BTR and the PRS house similar numbers of creatives, tech professionals and leisure workers.
Table 1: Residents’ Affordability – BTR (Urban) vs PRS (% of income spent on rent)
Private Rented Sector
Perhaps unsurprisingly, given its association with millennials, more than four in ten residents in both the BTR and PRS are 25-34 years old, the most common age band. Increasingly, though, the research claims BTR is catering to other parts of the market, with one in ten residents aged over 45.
The study also suggests BTR is evolving to suit the needs of different types of renters. The emergence of suburban BTR, for example – ‘high-quality, professionally managed homes located in suburban and peri-urban areas’ – is providing ‘affordable and attractive housing for all’, but particularly families, who represent 43% of the suburban BTR sample in the report.
James Simondson, assistant director (housing) at the BPF, said: “BTR homes – high-quality, professionally managed, purpose-built homes for private rent – are being taken up by a diverse range of people across England. Our report shows that residents in BTR are much more representative of the wider PRS than is often perceived – with one in five residents employed in the public sector and broad similarities across age, income and affordability.”
He added: “What’s more, BTR is delivering homes in the cities that government has identified for additional housing delivery. It is of paramount importance that the UK seeks to address the housing crisis by building a range of different properties and tenures to suit everyone’s needs.”
Dave Butler, chief executive of the UKAA, the main trade body for BTR, commented: “The 2021 Who Lives in Build-to-Rent? report clearly demonstrates the continued growth and evolution of the sector as a real choice for quality housing. In particular, the emergence of suburban BTR is adding to accessibility for an increasing range of residents, including families with children who are looking for affordable homes that offer long-term security in professionally managed communities.”
Stephanie Pollitt, programme director (housing) at London First, added: “BTR developments have shown that they are an important part of the overall housing mix in England, their diversity of which reflects the needs of those that choose to rent there. With a variety of amenities included in their monthly rent, BTR not only gives residents more bang for their buck, but also provides a unique and flexible renting experience, something which will continue to be reinforced as the sector matures.”
Sandra Jones, managing director at Dataloft, also said: “This research shows that the BTR sector is providing options for renters who already live in the wider private rental sector. PRS vs. BTR is not a binary ‘them and us’ and this kind of data sharing initiative is key to understanding the whole rental ecosystem.”
Is it actually affordable?
Here at PIT, we’ve covered many hundreds of stories on BTR over the last few years, since it really started to become a trend in early 2016.
We decided to look at some of the best-known schemes to get an idea of their average prices and how affordable these really are.
Greenford Quay, a Greystar development in North West London, which opened in late 2019, has studios starting from more than £1,300 per month and one-beds from more than £1,500 per month (with a minimum contract of 12 months). While it’s a decent-sized, nicely laid out and well-furnished space, few would argue this would constitute an affordable amount of rent each month for the average person.
It should be said that there are certain perks and extras that come with this price, including 24/7 onsite maintenance and management, a private gym, rooftop terraces, therapy rooms, cinema rooms, resident lounge and workspaces, as well as a pet-friendly attitude (which can be very hard to come by in the PRS).
Anaconda Cut in Salford, meanwhile, one of the tallest Build to Rent buildings in the country, has one-beds starting from £925 – more affordable, certainly, but some would argue still not particularly affordable to the vast majority of people in the UK. Again, various add-ons and amenities are part of the deal, including a concierge service, a state-of-the-art gym, co-working spaces, communal rooftop terraces and a sky lounge. It’s also pet-friendly and includes bicycle storage.
Now to Wembley Park, one of the UK’s most concentrated hubs of BTR developments, where Quintain Living (formerly Tipi) has a considerable presence. At its Landsby building, it has available (unfurnished) one-beds on offer for just over £1,370 per month – although this is as a result of a 25% off rent offer the company is running until the end of the year. Normally, it would be a much more costly £1,800 pcm.
In the Robinson, the brand’s newest building in Wembley Park, an unfurnished studio is typically on offer for £1,640 pcm, while a furnished one-bed would set tenants back nearly £2,000 pcm.
In both these cases, the tag affordable would be a hard one to justify, although Quintain Living would point to the incentives and perks – no deposits or hidden fees, free superfast WiFi, co-working space, social spaces, utilities set up and ready to go, and secure, flexible tenancies as evidence that tenants are getting excellent value for their money.
Elsewhere, at Moda Living’s The Lexington scheme in Liverpool, furnished studio flats are on offer for £900 pcm, while one-beds begin from more than £1,400. At the company’s Edinburgh development, known as The McEwan, furnished studios start from £1,370 upwards.
Once more, exclusive amenities, no fees, no deposits, flexible contracts, beautiful interior design and pet-friendliness are all part of the package and things you’d find more difficult to secure in the PRS.
Across the UK, it’s difficult to find anywhere with a starting rent cheaper than £900 for a studio flat inside a BTR - and often they're much more than this. Split between a couple, this could certainly be deemed affordable, but less so for a single person renting alone.
Similarly, most of the BTR developments in London and the South East have prices that are towards the higher end of the market.
The lack of requirement for deposits and fees, and the fact that utilities are often included as standard, helps the affordability argument as tenants save money here, but overall there remain question marks over whether BTR can actually be deemed affordable for the masses.