Build to Rent, while still in it's infancy, is now learning to walk. The realisation that the concept of a 'typical' renter is becoming a thing of the past. The modern residential market must serve a range of customer's needs if it is to keep up with demand.
When we talk about rented accommodation, too often the image that springs to mind is of young, single tenants sharing a flat, living close to work as they try to start climbing the career ladder. However, that stereotype which the UK subscribed to for the past 7+ years as Build to Rent came to fruition is becoming increasingly outdated, meaning that the way we design and deliver rental developments needs to change.
As I reflect on my tenure in the US multifamily market, I am a firm believer that this is a community for everyone, from a new graduate, indeed, to a retiree who has decided they don't want the hassle of a mortgage or home repairs and prefer a social community setting. While others chat about sharers and millennials, we need to recognise the value of catering to those renters who look for long term places they can call home.
The latest English Housing Survey, for example, confirmed that more than 1.5 million people aged 65 and above now live in rented accommodation. The jump in those renting privately over the past decade is significant. In 2007, 254,000 older people rented privately. That figure has now risen to 414,000 and some estimates suggest that a full third of those aged 60+ could be renting privately by 2040. That gives us little over a decade to dramatically alter the way we perceive and design build to rent services in the UK.
The Centre for Ageing Better reports that private landlords have the highest proportion of poor quality housing of any tenure type, along with higher levels of disrepair. Poor quality accommodation is unsuitable for any resident, but particularly so for potentially vulnerable groups such as older renters. The difference that the build to rent sector can make is therefore significant.
Tenancy length plays a role here too. Short-term tenancies are hardly likely to encourage older residents to agree home adaptations with their landlords, yet often a few simple adaptations such as handrails or ramps can enable older people to remain independent in their homes for many years. The Centre for Ageing Better reports that 16% of those aged 65 struggle with at least one daily living activity (such as washing or dressing), compared with around half of those aged 85. If a third of people over 60 could be renting by 2040, we need to ensure that their properties and their tenancy types enable them to maintain independence and dignity within their own homes.
However, it is vital to dispel the stereotype that mature renting does not always mean a senior community with healthcare services. Even within the mature renter group, we need to consider the different needs. Many simply want a safe community where they can engage with neighbours, have excellent service when repairs are needed, and a quiet place to hang their hats. This type of living also means they can travel without the strings that home ownership brings.
Mature residents are just one example. However, build to rent also needs to serve increasing numbers of families, renters with pets, and those residents who work from home and so forth. The Office for National Statistics reports that 15% of all people in work in the UK are now freelancing, undertaking contract work or self-employed. Online jobs platform PeoplePerHour has even gone so far as to suggest that 50% of the UK workforce will be freelancing by 2020. Even if that shift doesn't occur quite so fast, it's certainly the direction in which we are headed. Ultra-fast broadband and WiFi, then, are core services in new build to rent homes, not just for those watching Netflix but for residents who make a living from home.
The nature of shared facilities should be considered as part of this shift to a new customer base for rental accommodation. Quiet, professional workspaces where tenants can hot desk with their laptops, or bring a business contact in for a meeting will suit those who freelance or work from home. On-site cafés are ideal for older residents looking to socialise. Crèche services, "Parents Day Out" events, and proximity playgrounds and good schools meet the needs of those with children. Modern developments need to think all of this through and incorporate flexibility and variety into their design and service delivery if the UK is to truly service the needs of all renters. However, the disappointing truth is that many developers or those who are making decisions have not rented in years, so forget to look at the potential through their customers' eyes.
We need to shift our definition of a typical build to rent home. One and two bedroom apartments are great for many renters, but there's also a sorely overlooked need for low-rise, quality family apartments and homes that can be rented long-term. One only needs to look at what works elsewhere in order to deliver the perfect blend of accommodation.
In most countries, throughout North America and Europe, for example, you would be hard pressed to find a market where families were not recognised and considered an integral part of the community. The UK market is tragically inundated with one and two bedroom units, however, the few three bedrooms aren't considered on a reasonable level, both in proportional availability nor in affordability. Three and four bedroom rents are, essentially, priced by taking an average income and multiplying it by 3 or 4 incomes- a bit audacious really since I am not aware of many children making £27K a year. By pricing in this manner, the market is ostracising a demographic which has been proven to be longer term, more reliable, and often the most loyal type of customer. Once a family is located in a good home in a safe, happy neighbourhood and their children are settled in school, the likelihood of moving diminishes far more than a nomad-like millennial who will go to the next shiny community when it opens!
By putting ourselves in our customers' shoes, and taking a fresh, contemporary approach, build to rent owners and operators such as Atlas Residential can meet the needs of all those who rent in the UK. This is imperative if we are to prove that renting is not a stigma, but a beneficial and flexible way of life.
Whether people rent by choice or as a result of an inability to afford to purchase property, they deserve to have high quality accommodation that meets their individual needs. The UK is already behind the curve in terms of adapting its service design in this respect - the rental market has already changed significantly and we have much to do to catch up and provide the homes that the country needs. Only through substantial effort will we ensure that all renters' needs are met. Thankfully, the build to rent sector is well positioned to do this - we just need to continue striving to innovate and to design our services around future needs, as well as current ones.
Stephanie Smith, Operations Director at Atlas Residential