Cheerleaders for the troubled Build To Rent sector – who earlier this month issued dire warning about its declining pipeline of new homes – have produced a report claiming it’s popular with “a wide range” of renters.
The analysis – by the British Property Federation (BPF), the Association for Rental Living (ARL) and PriceHubble – claims there are parallels between BTR residents and the wider private rental sector tenants.
The survey claims to include data from over 36,600 renters living in 26,454 homes across 97 Multifamily housing (MFH) developments, and almost 10,000 residents in 77 Single Family Housing (SFH) schemes.
The report claims the percentage of income spent on rent has remained steady at around 30%, the accepted national affordability benchmark, and continues to account for a similar percentage of monthly outgoings as the far larger buy to let sector.
It goes on to says that what it calls “BTR neighbourhoods” have on-site amenities included within rental payments – 60% have a gym or wellbeing centre, 29% have a fitness studio and 70% have co-working or meeting spaces. It suggests that these are amenities that renters in the PRS regularly source and pay for separately.
Perhaps most controversially, the report says BTR has created “genuinely mixed income communities with the most common income band … remaining steady at £26,000 to £50,000, accounting for 43% of residents compared to 45% in the private rental sector. Overall, incomes between BtR and PRS residents are comparable, but the most common income band for the PRS is slightly lower at £19,000 to £25,000.”
It says the earnings profile shows that SFH caters for those on lower incomes: 76% of SFH renters earn below £38,000 (compared with 61% in the PRS and 38% in BTR. The most common income band for renters in SFH is £19,000 – £25,999, in line with the PRS.
The dominant age group across the rental market is 25-34 years, accounting for 51% of renters in BTR and 42% in the PRS. A nd then it says: “BTR is a captivating offer for couples and sharers too, representing 60% of renters compared to 43% in the PRS. In SFH 38% of renters are families.”
Melanie Leech, chief executive of the British Property Federation, says: “BTR is making a critical contribution to housing across the UK and our latest research shows that it provides new high quality homes that appeal to a wide demographic of people. The rental market is continuing to be squeezed by policy and legislative changes, which the latest delivery figure show is having an impact, and without the supply of new homes from institutionally backed build-to-rent developers, rental costs will continue to rise. It is essential that the UK living sector is seen as an attractive investment option, as build-to-rent homes will be a vital part of delivering the government’s ambitious housing targets.”
And Brendan Geraghty, chief executive of the Association for Rental Living (ARL), adds: “This latest report reinforces the consistency of BTR to deliver attractive, secure homes for renter demographics that mirror the wider PRS. Looking ahead to the next 5 years and beyond, we would like to see the sector develop to make BTR even more accessible to more renters, across all demographics in the UK.”
Many of the backers of BTR have recently formed a lobby group after admitting the sector is in crisis.
Completions for new BTR developments continue to outpace start-on-sites for the sixth consecutive quarter and the number of new schemes in planning in the second quarter of this year have dropped 18% since Q1.
This brings the pipeline of new homes in planning on a year-to-date basis to what the new lobby group describes as “a disappointingly low 5,000.”
On a more detailed basis, the figures show that while London has experienced a 16% growth in schemes in planning, there has been zero growth across the regions.
This article is taken from Landlord Today