Answering the demands of Generation Rent

Words by BSBG Media Team, Tuesday 13 October 2020

The UK’s developers, financial services companies, investment funds and local authorities have all in recent years been drawn to the UK’s rental market. More specifically, to the Build-To-Rent (BTR) sector, as a way to capitalise on the young demographic known as ‘Generation Rent’.

Generation Rent refers predominantly to Millennials for whom home ownership is becoming increasingly further from reach. It is difficult for a young adult to leave home and purchase a property on their own, and as a consequence many are entering into the rental market for the long term. This has opened the door to an influx of BTR concepts, and some notable new entrants to the sector that carry a lot of weight and financial muscle.

Build-to-rent is by no means a new concept, however as a sector it has seen remarkable growth over the past five years, and it looks set to continue that trend for the foreseeable future; a glance across London tells us that there are currently 16,699 BTR homes under construction, with a further 34,509 in the planning stages (source: BPF Q2 BTR Report).

The demand certainly matches the supply. BTR options are seen as appealing to young professionals within the rental market as there is often a stark contrast between private rental options and brand new developments designated specifically for this sector. Within BTR developments, residents are offered a variety of options that a private rental arrangement simply cannot match; communal areas, gyms, swimming pools, rooftop terraces, F&B options within the building, concierge and 24-hour security are just a few of these features – not to mention high-end and brand new finishings combined with generous apartment layouts. To have access to this new standard of living, which has not been traditionally available to the mid-market rental sector in London or any of the major cities across the UK, is of unquestionably huge appeal.

The value of a BTR scheme

For the stakeholders, the demand is clearly there, and in terms of total value, the impact of achieving an optimised, highly efficient design, combined with a streamlined construction cycle bears huge significance on deriving the most profit from any given scheme. BSBG Partner Andrew Bereza: “In the UK, the emergence of BTR schemes creates huge scope for architects that are proven to deliver efficiency and value for the client, combined with a high quality, sustainable building that retains a focus on elevating the lifestyle and wellbeing of the tenants. What we’re seeing now is a new dynamic, where developers understand that the success of their project will be driven by high-end living spaces, great amenities within the building itself, and the ability to create a sense of community within the development.”

BTR has a unique standing in the UK for renters because of the focus on service, professional on-site management and amenities. Shared, communal spaces such as resident lounges, landscaped gardens and courtyards combine with fitness centres, workspaces and shops/cafés/restaurants all located within the bounds of the development. “We are seeing BTR residential schemes in the UK that can now almost be classed as mixed-use – with elements of retail, hospitality & leisure and commercial. This correlates to our own expertise in delivering similar residential projects focused on long term tenancies and the demand for high quality communities that provide residents with all they need to live and work within the development,” Bereza continues. “In terms of both design and delivery, schemes such as Banyan Tee Residences – Hillside Dubai, Bluewaters Residences, Mulberry and BLVD Crescent are examples of transferrable architecture - they fit comfortably into the current dynamic we see in the UK residential market, where there is the desire to create a sense of community and a place where people come and want to stay for the long term.”

The similarities between London BTR schemes and many of the residential projects BSBG has designed and delivered in the executive role in Dubai go beyond the scheme itself and the inclusion of amenities, according to Bereza. “A developer approach to BTR focuses on a long-term model,” he explains. “From the concept stage we are modelling not only the design decisions, coordination and construction programme, but also the implications of managing the building over an extended period of time. This is the most exciting aspect of BTR – having the opportunity to work alongside developers that have values aligned with our own - a focus on real quality, sustainable, high-end residential developments that are built to last and retain long-term appeal.”

BSBG Media Team

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