Why build to rent housing construction has continued to prosper in the face of COVID-19

Build-to-Rent (BTR) is one sector of construction that has remained incredibly resilient, despite the challenging conditions of the past year. Not only have rent collection and occupancy levels remained high throughout 2020 and 2021 but there have also been supportive economic trends that have continued to allow this sector to expand. Now, many more investors are looking to funnel resources into BTR thanks to the potential that it has to continue to grow in the coming years.

The success of Build-to-Rent so far

The past year has seen some serious challenges for the property sector but BTR has not suffered in the same way as others have. For example, one impact of the pandemic has been a fall in rental receipts for large parts of the real estate sector but this wasn’t felt in BTR. In fact, it is estimated that 95% of rent was collected in the BTR sector in the second quarter of 2020, as compared to 80% in the commercial sector. Rental investment has remained robust in BTR throughout the pandemic and this is something that is supported by a historic trend for support for the property sector in previous recessions. There’s also plenty of evidence to suggest that recessions are usually followed by an increase in demand for new homes – these are usually rental homes as ongoing uncertainty deters people from making big purchases, such as houses.

The future looks bright for Build-to-Rent

These are just some of the reasons why BTR is likely to continue to prosper:

  • There is currently a significant misalignment in the BTR sector between supply and demand. Many more people are looking for rental homes in the UK than there are properties available and BTR rentals, which are often designed for a more modern way of living, are particularly popular. This imbalance in supply and demand is likely to continue to support growth no matter what the eventual consequences of the recent lockdowns and economic instability turn out to be.
  • The BTR sector is also able to tap into many of the behavioural changes that we have seen in consumers as a result of the pandemic and the lockdowns that have followed. For example, the need for a more functional working space on site – or dedicated co-working environments in the building – to accommodate greater working from home in the future. In addition, many people are now looking for living environments that are more environmentally friendly and have more of a natural backdrop and surroundings. Increasingly, homebuyers also want to have access to amenities on site to avoid the use of public transport, whether that’s a supermarket, cafe or gym. Many BTR projects integrate all these and offer a more attractive alternative to traditional renting.
  • A focus on quality homes has led many people away from traditional landlord relationships and towards seeking more value and consistency when it comes to the renting experience.

 

BTR satisfies many of the current needs in the rental community and is proving a resilient and versatile option for investors even during tough pandemic times.

 

Have a look at some of our living space construction projects.

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