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As renters overtake mortgage holders, is the future of UK homes in Build-to-Rent?

Build-to-Rent properties are springing up all over the UK, from London to Birmingham and Manchester. Often found in urban settings, these apartment blocks are constructed specifically for renting – not for purchase by occupants or buy-to-rent – and ‘institutionally owned’.

Their growth is driven by the rising cost of home ownership and the increasing proportion of young people who no longer see that as a critical life goal. A report from online estate agent Zoopla highlights that 42% of adults between 18 and 39 who don’t own a home now say they’re no longer considering a house purchase. This includes 38% of those earning £60,000 per year.

The BtR market is filling this gap by targeting renters prepared to pay higher rents for added facilities. The accommodation can include high-quality rented furnishings, in-house gyms, free Wi-Fi and areas for social mixing and third-space working. The Build-to-Rent market is framing ‘mortgage-free’ as a lifestyle choice.

BtR is also an interesting market for construction and building services. Although the buildings are ‘dwellings’, their scale requires commercial-scale approaches to construction methods and HVAC provision. They are ripe for the use of technologies such as heat recovery, ambient heat loops and even air conditioning. Measuring and monitoring energy use is also crucial for accurate billing.

Modern methods of construction (MMC) have been widely applied to BtR projects. The approach, which uses offsite manufacturing to produce ready-to-fit modules allows BtR clients to get a building up and running quickly. MMC also ensures fewer fitting errors on-site, reducing call-backs and delays in opening new buildings.

In addition, metering and monitoring at scale are essential for this sector as corporate landlords provide apartment-level billing while also tracking overall building use and energy consumption. Controls also help to support building maintenance and reduce the down-time of critical systems such as heating and hot water.

The scale of BtR schemes (they must provide at least 50 homes to be categorised as such) also means that they can benefit from sustainable construction and operation approaches. BtR developers are also interested in pursuing ESG goals, many aiming for high EPC ratings of A and B, for example. What’s more, unlike a build-to-sell product, the landlord pays for some operational costs such as energy and water use in common areas – so efficient operation benefits the bottom line.

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