The build to rent sector is doing well. According to the latest figures from the British Property Federation, there’s been a 12% increase in the number of BTR homes either planned, under construction, or completed in the last 12 months and that will translate into more than 150,000 additional flats coming onto the market. Outside London, the picture is even rosier with a 58% hike in units since this time last year.
It is too early for the BPF figures to reflect the impact of coronavirus on the build-to-rent sector’s housing pipeline but the BPF’s head of policy, Ian Fletcher, sounded an optimistic note this week, saying the sector remains attractive to investors. Anecdotal evidence from operators and developers supports their view, so we spoke to Sam Hay, MD of Ringley’s Manchester-based lettings division Life by Ringley, to get her insights into how the sector is faring.
Perhaps surprisingly, with so many people furloughed, rent arrears have not been a major issue to-date. “We have attempted to eradicate rent arrears by staying in contact with residents from day one and keeping them informed of what help is available if needed,” says Sam. “We are also being clear about the information we would require if tenants do feel they need a rent reduction or rent arrears arrangement. It’s important to ensure they understand that there is no rent free period and it will only be a deferral, so it’s better they remain up to date”.
The other potential problem for agents, is how to safely maintain social distance in build to rent blocks, but this is being carefully managed, with communal areas such as gyms, roof gardens and swimming pools currently closed to residents. Visiting contractors also pose a challenge but Sam says those she deals with are still attending blocks weekly to sanitise the communal areas and to attend emergencies – such as a recent sewage leak – that can’t wait. “We ensure that contractors are not ill and show no symptoms and always communicate with residents in advance so they know a contractor is coming,” says Sam. Life by Ringley is also offering initial virtual viewings for potential tenants and is sending residents a weekly email of suggestions for things to do while in lockdown plus online community chats and quizzes.
Jacqui Daly from Savills residential research, which produces the build to rent figures for the BPF, told Show House magazine this week that once the country is out of lockdown, build-to-rent developers should be confident to progress stalled developments. “We’d expect high levels of uncertainty to increase demand for rented accommodation as people look to avoid longer term commitments such as mortgages, or if borrowing remains more constrained. At the same time, we expect to see the leveraged buy-to-let sector remain under pressure, driving demand into build-to-rent”. She said.
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