In recent years, the UK’s property landscape has undergone a significant transformation, particularly in the rental sector. The once underestimated Build to Rent (BTR) sector is now a rising star, showing remarkable growth and adaptation to consumer needs, especially among single-family households. In today’s BTRNews, an article argues that this change isn’t just a blip on the radar; it’s a fundamental shift signaling the evolving preferences of British renters, the market’s response to these needs, and the potential future of living spaces in the UK.

A Sea Change in the Rental Space: The Emergence of Build to Rent

Not long ago, skeptics believed the Build to Rent concept, a transplant from the US housing market, wouldn’t gain traction in the UK. However, the past decade has proved them wrong, with the sector not just growing, but thriving, and single-family homes are at the heart of this expansion.

The demand for rental properties has skyrocketed, creating a fiercely competitive environment. Data from Rightmove, highlighted in a BBC report, indicates that there are now 20 viewing requests for every available rental property, a figure that has more than tripled since 2019. In some regions, like the North West of England, this demand balloons to 30 requests per property. This surge presents a golden opportunity for Build to Rent providers to cater to the clamoring market.

Single-Family Homes: The New Frontier in Build to Rent

Real estate advisor Savills forecasts a bright future for single-family rental homes, projecting up to 30,000 units by 2027 and a staggering 70,000 by 2032. This growth would increase single-family homes’ share of the UK Build to Rent market from 12% to 18% over the next decade.

The first half of 2023 saw overall Build to Rent investments dip to £1.9 billion, 21% lower than the previous year. Yet, the single-family housing sector bucked the trend, attracting a record £460 million in investments. This figure underscores the burgeoning interest in this demographic among investors and housing providers.

Driving Forces Behind Single-Family Housing Popularity

Several factors contribute to the popularity of single-family housing in the Build to Rent sector:

1. Economic Turbulence and Buying Patterns: The instability in the housing market and steep mortgage rates have deterred many from buying homes. This scenario makes renting an attractive or, for some families, the only viable option. Single-family renters are drawn to the quality assurance and amenities offered by Build to Rent homes, which are often more suited to their needs compared to the traditional private rental market.
2. Strategic Partnerships with Housebuilders: Build to Rent providers are not just constructing their own developments; they’re also purchasing off-plan properties from volume housebuilders. These bulk transactions benefit both parties, providing housebuilders with a reliable buyer for multiple units and giving providers a market-ready product, often at a discounted rate.
3. Desire for Quality and Security: The Build to Rent sector is known for its high-quality, well-managed properties. Unlike private landlords, who might own a few properties, Build to Rent providers have extensive portfolios, offering renters greater residential security—a critical consideration for families with children.
4. Changing Work Cultures: The shift toward remote work necessitates homes that can accommodate professional needs, a demand that older properties might not meet. Single-family Build to Rent homes are increasingly designed with flexible spaces, balancing open-plan living with the need for dedicated work areas.

The Evolving Face of Build to Rent Developments

Build to Rent developments are defying stereotypes. While urban renters might envision modern high-rises with luxurious amenities, the reality is that more families are gravitating toward suburban houses over city apartments. Organizations like Love to Rent, UKSFA, UKAA, and BPF are pivotal in bridging the gap between consumer expectations and industry offerings.

These suburban communities appeal to families for their proximity to schools, healthcare facilities, retail spaces, and green areas. Some even offer all-inclusive bills, 24/7 security, and additional services like cleaning, gardening, and dog-walking. For the environmentally conscious, options with renewable energy sources and electric vehicle charging stations are also available.

The Road Ahead: Adaptation and Growth

The Build to Rent sector must continue to evolve to meet growing renter expectations, especially with the end of government schemes like Help to Buy. There’s no one-size-fits-all solution, but understanding and catering to different demographics is crucial for providers wanting to secure long-term tenants.

The sector is likely to see further diversification, with investors recognizing previously underserved markets. The regulatory environment is also shaping development trends, with single-family homes poised to weather legislative changes more effectively than multi-storey developments.

In conclusion, the significance of single-family housing in the Build to Rent sector is undeniable and set to grow in the coming years. Providers who adapt to these trends, understanding and meeting the nuanced needs of different renter groups, will drive the future of this vibrant market.