WISE LIVING has backed predictions that Single Family Housing Build-to-Rent (SFH BTR) real estate investment will continue to grow. Based on Wise Living’s own involvement with 50% of the UK’s existing SFH BTR stock, the experts agree with the JLL 2023 Investor Survey’s strong SFH BTR growth forecasts. However, Paul Staley, managing director of
RESEARCH by the British Property Federation and Savills, predicting a huge expected growth of build-to-rent (BTR) homes in the UK over the course of the next decade – from 76,800 to more than 380,000 – is a product of a changing Britain says Paul Staley, director at Wise Living. Paul
BUILD-TO-RENT(BTR) specialist Wise Living, in partnership with developer Strata Homes, has recently launched its first development in East Yorkshire. This adds to Wise Living’s expanding portfolio in Northern England – with homes already in Birkenhead and coming soon to Rotherham. As UK house prices hit a record high for a fifth
The build-to-rent (BTR) market is bigger and more diverse than it has ever been. Once largely the domain of students and young professionals in big cities, the demand for rented property is skyrocketing, with developers that had previously worked to more well-worn revenue models now looking at how to get a slice of the pie. What’s more, getting
BDC 319 : Aug 2024
WISE LIVING has backed predictions that Single Family Housing Build-to-Rent (SFH BTR) real estate investment will continue to grow. Based on Wise Living’s own involvement with 50% of the UK’s existing SFH BTR stock, the experts agree with the JLL 2023 Investor Survey’s strong SFH BTR growth forecasts. However, Paul Staley, managing director of Wise Living, queries the relatively low confidence expressed by real estate investors – with JLL reporting just 20% of those asked expecting SFH to provide the greatest opportunities over the next five years. Paul, said: “It is surprising that only 20% of real estate investors surveyed by JLL expect SFH to provide the greatest opportunities over the next five years. For me, the changes in the BTR space have been undeniable over the past decade, and increasingly we are seeing SFH being spoken about in its own right, and for good reason. “This talk has translated into real results, with the number of deals agreed in the UK’s Single Family housing market in Q1 2023 valued at £450m, surpassing the full-year 2022 investment total of £330m, according to the Knight Frank Single Family Housing Report. “The question now is can this be sustained and will it continue? My answers is yes. Our existing work and current development pipeline points to a flourishing SFH sector. Suburban family rental homes are replacing home ownership and with many private landlords exiting the industry due to economic pressures, institutional investment opportunity is only growing.” Wise Living has seen a 93% increase on new SFH BTR tenancies starting in 2022 compared with 2021, with 2023 set to surpass this figure. The business has also reported strong occupancy rates of over 98% and low arrears of 0.6%, which points to the success of the model as a reliable investment option going forward. Paul, continued: “The opportunity now lies in the hands of institutional investors. To truly unlock this sector’s potential, a forward-looking and long-term perspective is needed. As the industry continues to flourish, we are working with investors to align their investment strategies with this momentum.” For more information about Wise Living, visit: www.wiselivinghomes.co.uk Building, Design & Construction Magazine | The Choice of Industry Professionals
RESEARCH by the British Property Federation and Savills, predicting a huge expected growth of build-to-rent (BTR) homes in the UK over the course of the next decade – from 76,800 to more than 380,000 – is a product of a changing Britain says Paul Staley, director at Wise Living. Paul said: “With the ongoing housing crisis, interest rate hikes on mortgages and an increased pressure on raising housing standards that are squeezing private landlords, professionally managed BTR homes are becoming more essential in the UK as the buy-to-let industry struggles to keep up with demand as home ownership becomes more unattainable. “People need a place to call home and it looks increasingly like BTR homes are poised to fill the gap within the housing market and will take a leading role. So, while the origins of BTR were student accommodation and city centre apartment schemes, this will expand into the rise of BTR single family homes (SFH). “Therefore, the predictions that SFH are expected to grow to 18% of all BTR stock from its 12% today is not a surprise. More people, right across the UK – not just in cities – want to rent a family home.” This change in the UK housing landscape is also influencing the behaviours of property stakeholders who are responding to these trends, according to Paul. Paul said: “For investors and housing developers, this has meant a shift in the types of portfolios they are creating. It makes sense to diversify and spread both the risk and opportunity. They are doing this by looking outside of the more established BTR markets and into SFH in suburban towns. “In fact, as the UK follows European trends and continues to change from a buying generation into a renting culture, it is highly likely that SFH will outpace other types of BTR housing eventually. At Wise Living we have seen this demand in-action, with over 15 schemes delivered in the past few years and a healthy pipeline of single family BTR developments.” As the industry grows this will inevitably increase the number of BTR specialists who will enter the market too, however this needs to be approached with caution, explained Paul. Paul said: “The industry has grown considerably over the last decade, but its success is dependent on the knowledge of the BTR specialists who need to guide investors, developers and local authorities in making the best decisions. Everything from location, housing layouts and types must be looked at and specifications developed to maximise return on investment, while also providing housing that is both high quality and value for money. “The earlier the conversation when it comes to coordinating value for BTR opportunities makes the process more efficient, less risky and speeds up return on investment.” To find out more about Wise Living, visit www.wiselivinghomes.co.uk/ Building, Design & Construction Magazine | The Choice of Industry Professionals
BUILD-TO-RENT(BTR) specialist Wise Living, in partnership with developer Strata Homes, has recently launched its first development in East Yorkshire. This adds to Wise Living’s expanding portfolio in Northern England – with homes already in Birkenhead and coming soon to Rotherham. As UK house prices hit a record high for a fifth consecutive month, the new Dream development of 50 BTR homes provides much needed private rental accommodation in an area where many struggle to buy or choose not to. With modern two, three and four-bed options, all located within proximity to Hull city centre, good schools, and Leeds Bradford Airport – Wise Living and Strata Homes have catered for young professionals and families alike. Mark Gratton, Land & Partnerships Director at Wise Living, said: “This continued expansion in Northern England demonstrates our success in finding the best locations for our high quality BTR homes. We have carefully matched the Dream Hull development to the needs of the local area and now we are pleased to have reservations open for the community in Hull to secure their new home. “We continue to see increasing interest in the BTR market, from investors, developers and tenants. This interest stems from how buoyant the BTR market is and its projected growth. Our tenants also value our proposition for various reasons, from the quality of the homes through to the community events we facilitate, alongside the assurance of having a professional landlord so that they can enjoy their home without the worry of it being sold or not having issues resolved quickly.” Gemma Smith, managing director at Strata adds: “Dream is the first phase of a large regeneration development in Hull and brings together homes for sale, properties to rent and new council housing. “Our aim was to design a new community that would offer something for everyone and improve the lives of generations to come. The demand for the homes has been really strong, we are looking forward to see this multi tenure development flourish over the coming years.” For more information about Wise Living and Dream Hull, visit: www.wiselivinghomes.co.uk/locations/hull/dream/
The build-to-rent (BTR) market is bigger and more diverse than it has ever been. Once largely the domain of students and young professionals in big cities, the demand for rented property is skyrocketing, with developers that had previously worked to more well-worn revenue models now looking at how to get a slice of the pie. What’s more, getting the right partners involved can help steer the direction of travel down the most profitable road, according to Paul Staley, managing director of BTR specialist Wise Living. The BTR market has grown rapidly in the past decade or so, largely off the back of investment from the U.S and Europe. While the rental market in the UK is behind the curve set in central Europe – where in some countries around half of homes are rented – the rising cost of owning a home is going to be a catalyst for the ever-increasing number of people in this country viewing renting property as a viable, long-term option. With the average house price in this country in the region of £270,000, households would realistically need to have a sizeable deposit and combined income in excess of £50,000 to even be considering a mortgage of that size. Factor in the cost-of-living crisis, and the challenges of society are beginning to stack against home ownership. The make-up of the BTR market is something that has developedorganically, and while investors are beginning to see the nuance, it can often be difficult to proceed without the right partners involved. The student market has been well established for decades now and is often seen as an easy win for investors, but it is the emerging sectors in which the most opportunity lies. The new breed What is clear is that BTR now means so much more than the previous perception of student flats, and as the sector grows, this will start to become more apparent to investors, housebuilders and – most importantly – prospective tenants. The newest element to the BTR mix is the single family – those cohabiting rather than sharing, typically with dependents and looking more at suburban housing rather than city centre apartments. This market is usually based around two-or-three-bed family homes and is one that is going to be of increasing relevance to investors and developers. The main barrier is therefore not the lack of opportunity, but how we as an industry make the transition to delivering more BTR schemes by changing perceptions. For instance, if a developer has become quite comfortable selling houses on the open market, making a reasonable margin and ticking over, BTR is usually a topic that may only be discussed once a year before being shelved. However, in times where money is tight and the spectre of recession continues to loom, BTR becomes a highly viable way to de-risk a developer’s expansion. If they can work with the right partner, an upfront block of units is taken off their hands and begins to generate income at a quicker rate. The critical point there, however, is that it needs to be the right partner – one which can work with the developer on an end-to-end basis. Only then is the majority of risk ushered away, and only then will BTR be the best option. The key starting point is establishing the criteria for the where, how, and what of a BTR development. The wrong type of BTR in the wrong place will not maximise returns, and the standard open housing market model won’t work. As a result, developers and investors must factor in the planning early on to truly achieve a partnership model that is successful. Pinpointing the correct location As an example, at Wise Living the first thing we consider is the location. For those renters looking at the two-to-three bed single family homes we specialise in, being close to local amenities and good transport links is often a make-or-break situation. However, we also need to be aware on behalf of our partners of areas where capital values outpace rental values. The next step is looking at the product type with the housebuilder and ensuring that what is being offered is right for the target market and area. This is often a sticking point with developers when they ask for pricing against certain specifications, but equally it is where early engagement and clear discussions are most worthwhile. By working together closely at an early stage, schemes can be finessed. Fresh house layouts and types can be looked at and specifications developed to maximise return on investment, while also providing housing that is both high quality and value for money. This de-risking conversation is particularly pertinent when large and challenging sites are involved. Anywhere with potential groundwork issues and lots of remediation to be done would usually throw up significant red flags for developers and investors. Identifying a partner at an early stage that can take that risk on – paying for the land upfront, then dealing with the groundwork and infrastructure side – has its clear advantages. The earlier the conversation, the more the risk is shared, and the less capital is drained at the start of the project, where typically costs are at their highest. It’s a value solution that may not have been on the table before, but will be increasingly viewed as viable as the public demand for rented accommodation grows. Changing a mindset It’s no secret that private rental properties are some of the worst maintained properties in the UK, which is why there’s a lot of pressure through legislation to try and rectify standards across the board. At Wise Living, our end-to-end service proposition provides an altogether different experience and means that we can ensure quality at every stage. Because Wise Living also handles the letting process, vetting of tenants and the continued maintenance of the homes and surrounding greenery, this type of service is helping to debunk the perception that some rented housing can be unpleasant and not well-built or maintained. We can add value to a scheme, rather than detract from it as we work with our partners to create genuine family homes that are professionally managed without hidden fees. So, not only can a BTR partner like Wise Living provide reassurance in the early stages by helping to design the best scheme, take on challenging locations and buy the units as fast as they can be built – the tenants will also be happy. It’s a mindset that is changing among tenants, and investors and developers are catching on that there is a growing niche in the market, but only if you
