The latest analysis by Cushman & Wakefield shows that the UK will need a minimum of four million new homes by 2040, with an increasingly large role for the private rented sector (PRS). The PRS is projected to see growth of 43%, from 19.1% of the total share of dwellings today to 24.6% by 2040.
However, the attention-grabbing figures are only one part of the picture, according to UK rental guarantor service Housing Hand. Managing Director Graham Hayward explains:
“Four million new homes are just the start. A thriving rental sector is about more than bricks and mortar. We also need to deliver exceptional customer experiences from start to finish. The Build to Rent sector understands this, focusing on a balance of amenities with experiential living and high-quality homes in easy-to-access locations. This balance is at the heart of future rental sector success.”
Housing Hand is partnering with Build to Rent (BTR) operators to meet this need. The company delivers seamless identity checking and guarantor services that benefit both renters and BTR operators. Identity checks can take as little as 35 seconds while still meeting stringent regulatory requirements, thanks to Housing Hand's significant investment in technological innovation over the past few years. This benefits renters by supporting them to access their accommodation of choice more rapidly, while Housing Hand's guarantor service provides peace of mind should they default on their rent. That peace of mind benefits BTR operators as well, enabling them to forecast income reliably and hit their targets consistently, all while leasing up faster thanks to the speedy ID checking and onboarding process.
Reduced time to let is a key metric for BTR operators and those who invest in the sector. Savills' Q2 2024 UK Build to Rent Market Update found that the average time to let a BTR home across the UK's 11 largest cities has dropped from 32 days pre-pandemic to just 24 days. In 'core cities' – Birmingham, Manchester, Newcastle, Bristol, Leeds and the like (excluding London) – the reduction in time to let has been even more sharp, dropping from 40 days in 2018-19 to 20 days in the year to Q 2024. Overall, BTR homes are letting 25% faster than they did before the pandemic.
“Reduced time to let is encouraging for the institutional investors who back many BTR schemes,” observes James Maguire, Head of Sales and Marketing at Housing Hand. “It reflects the strength of demand for BTR homes. This type of housing is now firmly established in the UK. We foresee demand for it growing significantly over the coming years, particularly as young people who are used to the exceptional service and amenities of the Purpose-Built Student Accommodation sector enter the rental market. Those young renters will, naturally, expect the same level of service and standards when they move into the private rented sector – and BTR will be there to deliver them.”
Housing Hand points out that students who have experienced the speedier letting process that it delivers with its Purpose-Built Student Accommodation (PBSA) partners are unlikely to want anything other than a similarly effortless rental experience when they graduate. They will also be seeking the same quality of amenities and sociability that the PBSA has delivered. That means looking to BTR homes to provide both high-quality living environments and an enticing selection of amenities, communal spaces and shared experiences.
Savills puts this demand in context, pointing out that the UK will see 4.7 million young people graduate between 2023–24 and 2026–27. Major cities such as London, Manchester and Glasgow, with respective graduate retention rates of 41%, 50% and 54%, have significant potential to meet these young renters' needs with Build to Rent homes. Within those cities, location is also key. Young renters want easy access to local shops and services, just as they have enjoyed during their time in PBSA homes.
“Build to Rent is here to stay,” concludes Housing Hand's Graham Hayward, “But that doesn't mean the sector can rest on its laurels. Innovation and consideration are at the heart of delivering exceptional customer experiences, meaning BTR operators will need to continue evolving their offering and the long-term partnerships that support them to deliver on that offer. Building occupancy is one part of the equation, efficiently collecting rent on time either from the tenant or their guarantor is the other – Housing Hand has a proud record of paying out 100% of all valid claims.”
