The Build to Rent (BTR) sector in the UK is a relatively new, but rapidly growing area of the property market. BTR developments are purpose-built, multi-unit residential buildings, often managed by a single landlord or operator. The sector is being driven by a combination of factors, including changes in lifestyle, the housing crisis, and the growing demand for rental properties.
Why is the BTR sector growing?
One of the primary reasons for the growth of the BTR sector is the changing lifestyle of young professionals and families. With interest rates having risen over recent years, access to mortgages has become more challenging and the rental sector is seeing higher demand. People are therefore choosing to delay buying a home and are opting to rent instead.
Additionally, the UK has a shortage of affordable housing, which has led to a significant increase in demand for rental properties.
Who is driving the BTR sector?
The BTR sector is being driven by a combination of institutional investors, developers, and operators. Institutional investors are attracted to the steady income stream and long-term stability of the rental market, and are investing heavily in the BTR sector. Developers are also seeing the potential for long term sustainable growth, as demand for rental properties continues to increase. Operators are responsible for managing the properties and providing a high-quality living experience for tenants.
BTR and the 15 minute city
The 15 minute city is a concept, first introduced by Carlos Moreno, a professor at the Sorbonne University in Paris. Urban planners, with this in mind, are creating neighbourhoods where residents can access all of their essential needs, such as work, schools, healthcare, food shopping, and leisure activities, within a 15-minute walk or bike ride from their homes. The idea is to reduce the need for long commutes, which can lead to traffic congestion, air pollution, and social isolation, and promote a more sustainable and liveable city.
The latest series of BTR developments follow this model and provide on-site amenities to make the 15 minute city concept possible in the real world.
Who lives in BTR properties?
BTR properties are designed to cater to a range of tenants, from young professionals to families. Many BTR developments, in the model of the 15 minute city, offer a range of amenities, such as gyms, communal spaces, shops, bars and on-site management, which appeal to a variety of tenants. Most BTR properties are designed to cater to a specific demographic of younger professionals who are looking for a balance of city living with great access to transport links and a lively community on their doorstep. There are others being built specifically for retirees (or the over 60’s) that operate within the same concept, but different facilities.
Where are BTR properties being built?
BTR properties are being built in cities and towns across the UK. London is currently the largest BTR market, with a significant number of developments underway. However, BTR properties are also being built in other major cities, such as Manchester, Birmingham, Liverpool and Leeds, as well as smaller towns and cities across the UK.
The growth of green HVAC in BTR Properties
In the piece we wrote about the business of Student Accommodation, we predicted that green energy would become a deal breaker for many residents. We are now seeing that in the market and Green HVAC (heating, ventilation, and air conditioning) systems are becoming increasingly popular in BTR properties as property developers and managers seek to reduce energy consumption, lower operating costs, and improve tenant comfort and health.
These younger, more affluent tenants are demanding green energy provision in their choice of rental property and Kimpton are at the forefront of delivering that, with almost all of our recent BTR builds utilising heat pumps for heating and hot water, supported by solar PV and all are using smart HVAC controls and BMS systems.
Greening of the heating and hot water supply in both the PBSA and BTR sectors is likely to be driven by legislation, but low ongoing running costs and visible green credentials will continue to be the key drivers for the building operators.
What does the future hold for the BTR sector?
The future for the BTR sector looks huge, with continued growth and investment expected in the coming years. The government has shown support for the sector and has introduced measures to encourage investment and development, such as tax incentives and planning reforms.
As demand for rental properties continues to increase and buying properties becomes ever more difficult due to affordability, developers and investors are expected to continue to invest in the BTR sector, creating more high-quality, purpose-built rental properties for tenants. Additionally, as the sector matures, there is likely to be an increased focus on sustainability, with developers and operators looking to create greener, more sustainable buildings and communities.
Kimpton and the BTR Sector
We are experts in HVAC for the BTR Sector. If you have a project you’d like to discuss in BTR or PBSA Sector, please call the Head Office team on 0151 343 1963, or complete the form below and we’ll be happy to help.