We may not have a crystal ball to predict the future, but we do have experience and experts on hand to tell us what tenants are asking for in 2022.
The renting trends
A third of London’s households now rent and this trend is expected to grow nationally. Renting was once the preserve of students and young people but now the private rented households with children has risen and there are more tenants aged over 65. To reflect the different types of tenants, the Build to Rent sector has responded with a wide range of property types and this looks set to continue into the new year.
A growing sector
Despite initial hold ups due to the Covid pandemic, the number of Build to Rent developments coming to the market across the UK is growing at a healthy rate. Developers have learned how to navigate the challenges that come from the pandemic and it’s likely that even more Build to Rent developments will be available this year. In fact, according to CBRE data, investment in UK Build to Rent totalled £3.5bn in 2020 and is predicted to rise to £7bn a year by 2025. This will lead to further choice for tenants and as more is written about the sector, increased education about the benefits of this type of rental.
Rapid house prices and tighter credit controls mean that people are having to delay homeownership. Home ownership rates for people aged 30 have halved in the past 30 years but that doesn’t mean that grown up children want to continue to live with their parents. Many people are opting to rent to get the lifestyle that they want now. Build to Rent gives people flexibility and convenience and enables them to live in a more central location in a higher quality property. As well as young people, the same can be said for families and older people who want to enjoy the many benefits of being part of the Build to Rent community. The trend for 2022 will see more people becoming tenants for the first time, either moving out of their parents’ home or those that want to experience a different lifestyle.
The last few years has shown a huge increase in the number of families choosing to rent. Although the bulk of new Build to Rent properties have been in city centre apartment blocks, the signs are that for 2022, there will be a rapid increase in the suburban Build to Rent market. Longer and secure tenancies, high-quality properties and many additional add-ons are creating a huge tenant demand, especially from an older adult and family market. In fact, many of the big players are getting involved such as Legal & General who have unveiled a new dedicated suburban Build to Rent arm to bring forward more than 1,000 homes annually.
Covid-19 changed the world and changed the way people work. As the hybrid working model is expected to stay, more people are looking for accommodation with good workspace and smart technology. Build to Rent offers instant connectivity including superfast broadband so there’s no more glitching out on zoom calls. But it is not just in terms of technology which makes the sector one step ahead. Many Build to Rent developments offer dedicated co-working spaces, giving people the chance to build relationships and separate home from working life. 2022 is likely to see people specifically choose accommodation that best fits in with their working life.
The rise of silver splitters
Silver splitters is a term given to older divorcees. This is a group who may be entering the rental market for the first time, driven by lifestyle factors rather than economic ones. Many of these households have enjoyed 70% house price growth so have the equity to make some decisions that best suit their new lifestyle. This can be anything from wanting to be close to a city centre, have access to all the Build to Rent amenities and be part of a community where they can meet like-minded individuals. Many will also have cherished pets that they will want to bring along, another bonus for the Build to Rent sector.
Huge investment potential
Increased regulations and tax changes are pushing private landlords out of the market, creating a void in the rental sector. Build to Rent has already shown itself to be resilient in adverse market conditions with 2021 being a record year. So, for 2022, the predictions are that there will be more major deals coming to fruition and a wider range of properties to choose from, satisfying demand from the consumer.
“In just a few years, we have seen an incredible growth in the Build to Rent sector. Tenants are becoming more educated about what it offers and how it represents a step up from the traditional rental market. They are looking for higher quality homes, lifestyle benefits, flexible tenancies and most importantly a community focus. Build to Rent can offer all of this with new developments springing up across the UK, with more coming to the market in 2022,” Peter Sloane, Chair of Love to Rent.