My surprise is caused by the fact that Build To Rent is surely the largest and most challenging innovation to have hit the PRS in well over a decade.
I am not suggesting it should be seen as a threat but it truly is a game-changer - hence my surprise that agents and landlords appear to be largely unconcerned about it.
For the (hopefully few) uninitiated, Build To Rent (sometimes also called Built To Let) is a generic term for blocks of purpose-built rental properties which are funded by institutions.
Their specifications are tailor-made to renters in the location where the blocks are sited - probably professionals in central London, perhaps low-paid workers in the Midlands.
Instead of selling the individual units off to private landlords upon completion, the very institutions that fund their construction keep the blocks in their own possession, and go on to manage the lettings - so they act as landlord and letting agent combined.
Now, Build To Rent is long-established in the United States and I have seen examples of BTR blocks in Texas and New York.
They were completely different in some ways.
The former were designed for oil workers who were based in the area for between three and six months at a time, and wanted functional, clean accommodation, while the latter units were aimed at long-term young professional renters, many of them highly-paid financial services employees.
But they had some things in common.
They both had what we call concierges and what they called block managers, working 24 hours a day behind the front desk and handling basic management services for tenants.
They both had rooms that were highly functional, designed for rapid cleaning and low maintenance, even if the NY units were highly luxurious and the Texan units were merely functional.
They both had good quality landscaped grounds - the Texan one much larger than the NY one, unsurprisingly, but again both had an emphasis on clean, easy management.
And, crucially, both were heavily branded by the (different) firms that had built them and went on to manage them. The theory behind this - and it’s a key element of Build To Rent in Britain, too - is that a good service encourages brand loyalty from renters.
The same principles are becoming apparent at the very early stage that Build To Rent has in this country; BTR is happening not just in London but now in the West Midlands and Scotland, too. Expect it, within a few years, in major university cities and those locations with an entrepreneurial streak - Cambridge, Bristol, Exeter, Brighton, for example.
Against this background, why do I think letting agents and landlords should be reacting?
Well, without putting too fine a point on it, they need to improve their offer.
The high level of service which BTR is likely to guarantee, at an economy of scale that may make rent levels very competitive indeed, will be a challenge to letting agents and landlords alike: but it is a challenge that they should, surely, be happy to meet.
As a landlord myself, I have already asked my letting agent to make sure that if any BTR appears in the same patch as my properties, we should attempt to match the offer.
It will be difficult. My properties, like those of most buy-to-let landlords, are relatively old city centre examples, converted from larger houses. It will be tough (but absolutely not impossible) to make them as appealing as a purpose-built rental apartment.
By starting early, by putting my agent on alert, I hope to succeed.
Let’s hope the rest of the existing private rental sector does the same so that BTR becomes a complement to what we do now - and does not eclipse us in many cities up and down the country.
(This blog first appeared on the Industry Views section of Estate Agent Today)
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