Those looking for a home which can adapt and evolve to enhance their quality of life will benefit from a number of emerging trends, so there is clear scope for the market to continue to go from strength to strength.
From co-working spaces, cinema rooms and furniture rental, to pet pampering, on-site salons, and tenant discounts, BTR offers renters access to a wealth of facilities and a new way of living.
Live, work, play
The pandemic has reframed 9-5 office days as a thing of the past, so renting residents are now seeking living spaces to encompass their work, life and play.
Easy access to coffee, food and entertainment facilities are becoming increasingly sought-after as people forgo the daily commute and the benefits that come with it, such as being city-based and being in the thick of a sociable environment.
While a luxury swimming pool within an apartment complex would have been a big draw for renters pre-pandemic, they are now looking for perks with a sociable element such as bars, cinemas and gym studios that give access to virtual classes such as Peloton.
One example is the FirstPort managed Ferrum building, which offers effortlessly stylish New York style apartments to rent in Wembley Park. The building offers personal services such as gifting residents with an on-site hairdresser.
Other developments have transformed their rooftop space into a garden area to offer social events such as barbeques and drinks, or invested in a communal office space, allowing a social and relaxed working environment away from the living room.
Pets – the new furry flatmate
Google searches for ‘buy a puppy’ increased by 115% since the start of the first UK lockdown, and over the course of the pandemic 3.2million homes welcomed a new pet. The rental sector has traditionally been a difficult place for pet owners with many landlords and leases prohibiting them, but as the new way of living has unveiled just how important animal companions are for so many, the BTR sector is embracing consumer demand.
In January 2021, the government updated the Model Tenancy Agreement to encourage landlords to offer greater flexibility in their approach to pet ownership in rental properties. Developers are now not only allowing pets, but they are also looking to offer additional services to appeal to pet owners.
Some developments now offer ‘in-house’ dog walking and pet grooming services with bespoke washing and grooming areas. A co-living layout means renters can easily organise pet events and ‘meet-ups’ (when restrictions allow) with animal owning neighbours. Alongside this, pet tech is also making an impact, including innovations such as smart pet doors by companies like Sureflap.
BTR gives new life to ‘dead’ retail spaces
Sadly, the pandemic has hit our high streets hard, with the likes of Arcadia and Debenhams leaving roughly 200 full-size football pitches of large-scale retail space now vacant, according to Altus Group. Department stores are harder to fill with new retail, due to their sprawling spaces, but this does provide an opportunity for BTR to convert retail premises into residential sites.
BTR has proven a stable market in the face of pandemic and continues to appeal to investors seeking long-term, reliable returns. According to Savills, over a third (35%) of investment were new to BTR. In fact, it’s even attracting new types of investors – at FirstPort we’ve seen a huge increase in the range of investor profiles including retailers, smaller funds and family enterprises.
Retired rental living
The profile of renters is changing – it’s no longer a sector driven by city-dwelling, young professionals looking for a cheaper way of living. A new market of over-55s is migrating towards renting with many looking for purpose-built communities and more flexibility.
Quality of housing is interlinked with physical, mental and emotional wellbeing, and enabling people to choose how they live, with the flexible offering of independence and care if needed, will be a major draw.
Former care homes, such as Hilltop Lodge in Epping, are planning to repurpose their space into dedicated BTR retirement developments where residents have their own flats with the benefit of communal lounges, and we continue to work with more seaside locations popular with the over-60s demographic.
The pandemic has encouraged everyone to reconsider how and where they want to live, and it has caused a shift in priorities. Young professionals looking to rent are now choosing to look outside of Central London. This will be a key catalyst for the BTR market to move across the UK and we’re seeing that play out already.
Currently, 84% of all UK BTR planned developments are outside of Central London, and over the last year, we’ve seen an increase in demand from our clients to build sites in Brighton and the South Coast.
BTR has come a long way in the last few months and is set to evolve even further as the world gradually adjusts to the new ‘normal’ and I expect new demands, trends and challenges will continue to emerge.
Ultimately, the widening mortgage gap and the appeal of greater flexibility will drive the demand for high-quality, professionally managed rental homes.
The post-Covid-19 world provides a huge opportunity for BTR to continue to move with the times and deliver on its commitment to change the rental market, keeping consumer needs and desires at its core.
*Lee Richards is director of market services at property management firm FirstPort