What can UK Build-to-Rent learn from US Multi-Family?
Breakfast cereal. Peanut butter and jelly. Reality TV. Three of the most successful enterprises to have originated in the United States over the years.
One of the latest trends crossing the Atlantic is the notion of multifamily living (what we call ‘Build-to-Rent’). The Build-to-Rent sector may be relatively young here, but in the US it is a mature part of the real estate business. Dominated by institutional investors who buy and sell multi-million dollar investments, the market looks set for continued growth after 20 very healthy years. With 250,00 new units delivered across the key US markets in 2017, a recent report by Freddie Mae predicts that multifamily is projected to grow to $317 billion in 2019.
It is important to recognise that in the US market, there is no single model for what multifamily living looks like. Attention is often focused on large, high-rise, high-end schemes with extensive resident amenities, but 70% of the US multifamily sector is low rise, suburban and focused on families. Yes, some developments may include cinema rooms, gyms, residents’ lounges, roof terraces and even restaurants, but 49% of renters are over 35 and 46 percent adults with children.
The American market has changed as the demographic has grown up. Developers are creating a variety of schemes with a focus on developments that are built to last and that keep the tenants happy. Lifestyle demographics suggest renters will spend at least a decade in PRS, so it is crucial that developers are designing for the long term – which means family spaces and building a real sense of community.
In the UK, the Build-to-Rent sector has grown substantially in recent years and it is clear that this will continue. According to a study by Knight Frank, there are currently 29,416 professionally managed units completed, with 110,092 under construction or in planning. They also estimate that by 2023, 22% of the housing market will be Build-to-Rent.
But what lessons can be learned from the US market? Well, according to the National Planning Policy Framework, Build-to-Rent can be defined as “Purpose built housing that is typically 100% rented out. It can form part of a wider multi-tenure development scheme comprising either flats or houses, but should be on the same site and/or share a common border with the main development. Schemes will usually offer longer tenancy agreements of three years or more, and will typically be professionally managed stock in single ownership and management control.”
Even from the definition, it is clear that this is a new world for Generation Rent.
These are young people who may have lived in Purpose Built Student Accommodation (PBSA) as students and may have experienced high-quality, purpose built living areas with professional management teams, so it makes sense that they will be more open to the idea, and more likely be able to afford to live in quality rented accommodation than previous generations. Indeed, a recent study by Allsop concluded that 91% of tenants consider their rented property to be their home.
However, if people are to abandon the aspiration of affording their own home and commit to a lifestyle of renting then significant improvements to resident lifestyle and well-being will need to be realised. That means we need to look at why the American market has been so successful and design a variety of accommodation that’s suitable for the whole spectrum of society.
- According to 12 USCS § 1715z-22a (1), the term multifamily housing means “housing accommodations on the mortgaged property that are designed principally for residential use, conform to standards satisfactory to the Secretary, and consist of not less than 5 rental units on 1 site. These units may be detached, semi-detached, row house, or multifamily structures.”
Smart Fibre Infrastructure™ (SFI™)
Glide Residential’s SFI™ is a full fibre, landlord broadband solution that provides a fast and simple way to cable a building, specifically designed for the build-to-rent (BTR) sector. With SFI™, buildings are future-proofed for the next 25 years, as there are no restrictions on what can be delivered via fibre. SFI™ also enables the provision of many smart technology services such as Wi-Fi controlled lighting and heating, door entry, CCTV, digital signage, smart metering, and SkyQ. SFI™ helps add rental value, whilst reducing operational costs, and is designed with developers, landlords, and their residents in mind.
Managed Internet Service
With Glide Residential, you can also benefit from a fully managed internet service for private rented residents and fully managed internet solutions. What this means is everything is managed from the cabling, to launch, to ongoing 24/7/365 support. Complete managed broadband services from a single provider. The network is monitored around the clock to ensure everything is running smoothly, and each customer has their own dedicated service manager as one single point of contact to provide everything you need.
Get in touch with a member of our team to find out how we can enhance your build-to-rent (BTR) development. Call us on 03333 800 800 or drop us an email at firstname.lastname@example.org, or find out more details on our website https://glidebusiness.co.uk/residential/service/smart-fibre-infrastructure
No time to chat? Get a Quick Quote for your Build-to-Rent development here. https://glidebusiness.co.uk/sfi-quick-quote