Estate agency Knight Frank, in collaboration with Build-To-Rent operator Moda Living, has released a comprehensive report highlighting the advantages of the Build-To-Rent (BTR) sector over the traditional Buy-To-Let (BTL) market. The report, titled the BTR Resident Experience Index, draws insights from 247 BTR schemes across the UK, providing potential investors with valuable information on what constitutes a “best in class” BTR development. By analyzing social and economic indicators, Knight Frank has identified the key factors that contribute to an enhanced resident experience within BTR communities.
Better Quality of Life
The BTR Resident Experience Index encompasses 21 unique social and economic indicators, grouped into six categories, which significantly influence residents’ quality of life within BTR developments. The categories are quality of scheme, affordability, accessibility, sustainability, health and wellbeing, and tenant satisfaction. Key elements considered include amenity provision, walkability, energy costs, energy efficiency, air pollution, and local crime levels.
The research conducted by Knight Frank establishes a clear correlation between high-quality, well-located, and sustainable BTR schemes and overall resident satisfaction. Based on the analysis, schemes are ranked on a scale of 0 to 100, with those scoring 70 or above placed in Band A, and bands reducing in 10-point increments down to Band E.
Lizzie Breckner, head of BTR research at Knight Frank, emphasizes the importance of resident experience within the BTR sector. The research demonstrates that focusing on resident experience enhances operational performance by increasing occupancy rates and income, while simultaneously reducing costs. Knight Frank’s analysis is groundbreaking, providing a quantifiable understanding of the features necessary for a BTR scheme to deliver an exceptional resident experience.
Building on this analysis, Breckner highlights the flexibility of the results, as the elements related to resident experience can evolve over time. As such, the findings will be invaluable in informing site selection, design, and management strategies. This knowledge will assist both individual schemes and the broader BTR sector in continually improving and meeting residents’ evolving needs.
Knight Frank further identified specific specifications that contribute to the highest levels of resident satisfaction. The optimal BTR scheme includes at least seven amenities, such as lounges, gyms, and terraces, with an average unit size of 67 square meters. Additionally, having a wide range of local amenities within a 15-minute walk, including quality shops, healthcare services, and access to an average of five bus stops and one train station, adds value to the resident experience.
A high-scoring BTR scheme also boasts an Energy Performance Certificate (EPC) rating of B or above, low carbon emissions, and energy costs averaging below £4.70 per square meter. These factors demonstrate the commitment to sustainability and affordability, further enhancing resident satisfaction.
Furthermore, a poll conducted among Moda Living’s BTR residents reveals the importance of community, with 70% valuing a sense of belonging. Additionally, 77% are willing to pay a premium for higher quality amenities, and a significant 90% state that their living environment has a substantial impact on their overall wellbeing.
Conclusion
Knight Frank’s BTR Resident Experience Index and the accompanying report, developed in collaboration with Moda Living, provide essential insights and data for potential investors in the BTR sector. By understanding the key elements that contribute to an outstanding resident experience, investors can make informed decisions regarding site selection, design, and management strategies.
The BTR sector, with its focus on quality, affordability, and sustainability, offers a game-changing alternative to traditional Buy-To-Let investments. With the BTR Resident Experience Index as a guide, investors can ensure that their investments align with the evolving demands and expectations of discerning renters.