As the private rented sector grows apace, it’s bringing a new approach to new build, in terms of designing and maintaining dwellings. Being largely investor driven, there’s additional emphasis on lifetime costs and asset management – and Eurocell could prove a key partner in these.
According to the latest English Housing Survey figures, published in late January, 20% of households now rent privately, a figure that rises to 30% in London. The number of people in the private rented sector (PRS) has been rising since 2002, and has more than doubled since then.
The predictions are that this proportion will continue to rise with build-to-rent developments taking a larger and larger share of the PRS market. This is certainly the Government’s intention: its policies aim to discourage rogue landlords while encouraging purpose-built and professionally managed rental homes.
The demands of build-to-rent are quite different to those of build-to-sell and we already see this playing out in the way new developments are being procured and delivered. Build-to-rent developers and investors are interested in programmes of multiple developments, rather than one-off projects; elements of offsite manufacture and standardisation; a focus on design and quality; and a greater interest in whole life costs.
According to a 2017 report by Savills, commissioned by the British Property Federation (BPF), the PRS in the UK is worth over £1 trillion. However, 98% of the market is owned by small landlords who each have 10 properties or less.
Given the shortfall in housing in the UK, institutional investors are keen to invest in this sector. With a lack of property to buy, they are developing or financing their own build-to-rent schemes at an increasing rate.
At the latest Q4 2017 count by the BPF, there were 105,214 build-to-rent homes either complete, under construction or in planning. That compared to 95,918 in September 2017 and 69,825 in the first quarter of last year.
Another trend highlighted through the BPF’s figures, compiled by Savills, is that the number of large-scale developments are on the up. There were 34 planned developments of more than 500 homes each in September 2017, compared to 24 such developments in the first quarter of 2017.
Though build-to-rent was born in London, it has quickly spread to other cities around the UK. Developers are looking for city centre sites with good transport links, close to mainline railway stations or metros.
In January, Legal & General announced Brighton’s first ever build-to-rent development and the eighth city in which the insurance giant will build such a scheme. Its other sites are in Leeds, Bristol, Bath, Walthamstow, Birmingham and Salford representing around 2,000 homes and £1bn in investment.
Legal & General has even set up its own modular housing factory in Sherburn near Leeds. Affordable housing provider RHP is set to be the factory’s first customer, although to date only a prototype house has been constructed.
The first offsite-manufactured homes for RHP – tiny, one-bedroom flats – could leave the factory in the summer. But there’s no news yet about Legal & General supplying its own projects.
Offsite will also feature in £5bn-worth of developments planned by Stanhope and Network Homes over the next five years, featuring a mix of tenures including build to rent. The developers have just announced that Laing O’Rourke will be their construction partner with parts of the building such as bathrooms and balconies manufactured at Laing O’Rourke’s Explore Industrial Park facility in Worksop.
For multi-development portfolios, it’s easy to see why standardisation is important. Economies of scale may allow the capital cost of products and packages to come down, and ongoing repair and maintenance will also be more efficient and cost effective if there are fewer parts and products to work with.
Whole life costs
Specifying homes that will become an asset for investors, rather than sold on to individual buyers does require a change in mindset. As well as finding ways to keep tenants there for longer to minimise void periods, elements of the building’s envelope and internal fit-out must be chosen with lifetime and life cycle implications in mind. Kitchens and bathrooms, floor and wall finishes, joinery and windows will all come under scrutiny.
This is still a difficult area. Often developers will be constructing a building and then selling it on to an investor within a few years, so the incentive to increase capital cost to reduce operational cost may not be there. However, property experts suggest that investors will be looking quite carefully at whole life costs when they make their investment decisions – whether the purchase is being made at day one or ten years down the line.
Sustainability will be important for build-to-rent homes, motivated by pragmatism rather than the desire to get a green rating such as BREEAM. The impact on tenants’ bills and comfort levels will influence decision on renewable technologies or improved insulation levels alongside the balance between capital investment and operation spending.
An emphasis on whole life costs and maintenance requirements means that the build-to-rent sector is reportedly leading the residential sector in the uptake of BIM (building information management). Used largely in the public sector, due to a Government mandate, BIM makes perfect sense in the PRS: knowing instantly where a window came from, how to get replacement parts or what maintenance regime it needs will save a huge amount of resource.
This emphasis on whole life costs and maintenance requirements isn’t about planned maintenance programmes and replacing kitchens every 25 years – it’s about taking a more holistic look at properties and making decisions that will boost value – which could be measured in financial and social terms – of the portfolio.
This is an approach that Eurocell whole-heartedly endorses. It’s important to look not only at initial cost but at cost in use: what maintenance will be required over a building element’s lifetime and how will that impact on the operational cost for the landlord and comfort of the homeowner.
In this context, energy efficiency is of major importance too. Not just because the environment is of interest: building managers and tenants are deeply focussed on running costs. Elements, such as windows, also must require little, if, any maintenance and they must offer high levels of energy efficiency.
Obviously, in this context, PVC-U window systems are a cost-effective and high-performing systems win for specifiers. PVC-U windows have been given a minimum reference service life (RSL) of 35 years by the BRE, with minimal maintenance during this period. First generation PVC-U windows – now 50 years old – are still performing strongly well beyond this. Glazing units, the most expensive part of a window, regardless of material, will fail long before the frame.
While PVC-U windows aren’t maintenance free – they will still need to be cleaned, and hardware and other items looked after – they are incredibly low maintenance and the cost-in-use burden is significantly less than other materials.
Another key element of PRS developments is the increase in the use of modular and offsite construction. Recognising both this trend and the perceived and real difficulties in handling windows in this context, Eurocell has created InSite.
Insite promises to deliver a whole host of benefits to the timber frame and off-site construction sectors by enabling enable timber frame manufacturers to install fully glazed, fully finished windows into wall panels as part of the factory production process, thereby reducing on site disruption and labour costs while saving time on build programme schedules.
There are also significant health and safety benefits with factory fitting and the reduction in manual handling, as well as an estimated 30% improvement in transportation yields because the windows are fully recessed, allowing panels to be stacked flush when loaded.
InSite comprises market-leading PVC-U window performance with an innovative fixing method that allows factory fitting of the window directly into the wall panel. Once the timber wall panel has been erected on-site, the windows are checked to ensure they are plumb and square and then simply secured to the first fix position by pushing the frame outwards to lock it into position. An intelligent design modification enables cills to be simply clipped on and mechanically secured once the windows are locked into position. The whole panel assembly can be made watertight within one day so interior trades can begin work immediately, saving time on programme.
As part of its development, the InSite system has been fully tested, including resisting wind load pressures well more than 200mph – significantly beyond the highest Category 5 hurricane winds rating (156mph+). Design calculations have been verified by independent timber frame structural engineers. Owing to the controlled nature of manufacture, the installed windows offer leading energy efficiency performance, with a U-value of just 0.8 W/m2 possible, a level that far exceeds current Building Regulations requirements.
A 10-year product guarantee* on InSite windows provides customer peace of mind, as does full product traceability, thanks to a simplified supply chain and centralised documentation.
Sounds appealing? Find out more by visiting www.eurocell.co.uk/insite or calling the Eurocell Customer Care Team directly on 0800 988 3049. *including 5 years on glazing units and two years on internal window hardware.