“BTR, is that an app?”
In a recent Property Week article on Build to Rent (BTR), Grainger’s Chief Executive Helen Gordon discussed the need for education around the sector, stating that ‘BTR is still misunderstood by too many’. The need for education around BTR is vital for the sector’s continued growth and while the article focuses on the impact this lack of understanding has from a financial perspective, the lack of education within our target audience also poses a threat to the perceived value of the sector.
Since embarking on my property career the words ‘Build to Rent’ have become such a frequent feature in my every day conversations that it’s hard to believe the subject isn’t so commonplace to everyone. But when the work bubble pops and I head home to a group of mid 20, non-property friends, my mentions of BTR are met with a confused ‘BTR? Is that an app?’
When I first mentioned Build to Rent to my housemates I was shocked by the blank expressions I was met with, and it occurred to me that perhaps BTR wasn’t as widely talked about as someone in property might believe. As it turns out, an Instagram poll revealed that 97% of my friends have never even heard of Build to Rent and what’s more alarming is that of the 3% that have heard of it, only 1% understand the concept.
This demonstrates one of the greatest challenges faced by the sector, as without a clear understanding of the BTR offer there is a risk of potential customers being turned away by the higher price. Through research into the rental market, in partnership with SAY Property, Conductor found that for the majority of renters price is the first thing the they look at, however, 87% of those interviewed would happily pay 10% more for extra services.
Unfortunately, without the target audience understanding what is included in the higher priced BTR offer, developers and operators run the risk of pricing themselves out of the market, and this risk is only heightened by Gordon’s observation that when buying land ‘BTR investors either lose out or are forced to pay a higher price, which must then be recouped through higher rents’.
In order to combat these issues the sector needs to come together to better explain the BTR offer to misinformed audiences by outlining its numerous benefits, such as increased security, communal spaces and flexible leases to name just a few. Once consumers are aware of the benefits, they are less likely to be turned off by the seemingly higher rental costs, as is evidenced through the popularity of the US multifamily market. A more mature market than the UK’s BTR sector, America’s multifamily market has had over 25 years for its audience to understand its offer, and as a result renting is seen as an attractive lifestyle choice for all demographics.
So how do we bridge this 25-year gap and collectively educate the rental market? Perhaps one of the best ways to start is by changing where the conversations surrounding BTR happen. Discussions with my peers on where we get our information from put Instagram and Twitter at the top of the list, naturally, but also highlighted the amount of time we spend reading online magazines, music reviews, news sites and blogs. By tapping into the platforms and publications that our audiences are consuming we can start to erase of the misunderstanding surrounding the BTR concept and educate people on what this growing sector has to offer.
Image showing the communal gardens at HUB’s BTR development, Rehearsal Rooms, in North Acton, taken by Jack Hobhouse