The need for efficiencies in an expanding build to rent sector

The build to rent sector has the potential to be one of the fastest growing sectors in the UK this year. There are already signs in the market that this is the case, with a recent Savills report finding 2023 to be the sector’s second highest year of investment ever at £4.5bn. This, despite an overall slowing housing market. However the sector as a whole will need to embrace emerging technologies to keep apace with its growth.

Expected Growth

The growth in build to rent housing looks set to further increase across 2024, with a recent Cushman & Wakefield poll of leading investors highlighting £8bn worth of investment earmarked for the sector as costs of debt and construction ease. These figures certainly back up what we at Helpthemove have seen in our sector, with a 143% increase in business from this sector last year when compared to 2022.

We are also in an election year, and younger voters in particular have consistently raised rental property accessibility and availability of affordable housing as a major issue. Expect both main political parties to highlight reform in the rental sector as key cornerstones in their manifestos ahead of the General Election, whenever it lands. Whichever party gains a majority, it seems certain that there will be changes coming in the future. And with smaller private landlords exiting the sector, there is a huge opportunity for BTR organisations to leverage the current shortfall between demand and supply.

A changing landscape

As the opportunity for commercial build to rent organisations widens in the UK, so too does the responsibility for the same companies to cater to “generation rent”. With the recent news that we are in fact in a mini recession, sectors such as build to rent are increasingly important. They can help give a much-needed shot in the arm to the wider economy through investment that covers construction, urban development and housing, whilst having a positive impact on local communities and the potential for addressing housing shortages.

Given the rate at which smaller private landlords are exiting the sector due to increasing mortgage premiums and future legislation around Section 21 notices, we could be on the precipice of a changing landscape in rentals in the UK.

Streamlining through tech

With sudden growth in any sector or industry, strains can be felt as organisations struggle to adapt to an increased workload or demand. In this regard, build to rent organisations will need to acknowledge the challenges that come with managing and maintaining a growing number of properties and developments. The key aspect here is timing – it is easier to incorporate new tools, systems and processes in a proactive manner whilst capacity allows, as opposed to being reactionary. Organisations that do the latter may find they miss out on major tenders to competitors that have been quicker off the mark.

There is a need for the sector to embrace emerging technologies across the board that can improve efficiencies and automate manual processes. There are options in the market that cover a broad range of processes that can help, from utilities management to tenant referencing. Whilst these have been readily embraced by the lettings sector in the past, the build to rent market finds itself playing catch-up, but finds itself in a unique position of being able to do so at the outset of its boom.

How these platforms integrate with the existing tools and processes of any given organisation, such as CRMs and management systems can also lead to improved joining up of data. This ensures they are future-proofed to make informed decisions based off up-to-date and reliable analytics about property management, tenant preferences, and resource allocation.

An enhanced tenant experience

As the build to rent sector’s prominence in the housing space rises, there is a huge opportunity for differentiation from other providers such as lettings and private landlords, where some bad apples have tarnished the perceived reputation of these groups as a whole. By using technology solutions to enhance the tenant experience at the outset and through their tenant journey,  build to rent organisations can ensure their end-users are their main champions. From streamlined leasing procedures to prompt maintenance responses, again, there are already numerous processes that can alleviate pressure in these areas.

Enduring sustainability

With building and housing projects coming under increasing scrutiny of their ESG practices, technology solutions will also be able to assist build to rent organisations with ensuring they stay within these guidelines. This will be ever-more important given the recent October 2023 updates, as well as planned future legislation. We are currently exploring how our solution can aid in ESG compliance in the very near-future, with issues such as mould and mildew, heating and insulation and electricity usage all under remit.

Ensuring organisations maintain a low carbon footprint or stay carbon neutral is also on the agenda, and with advancements being made in this area all the time, it’s important for both the relevant organisations and their suppliers to consider going forward.

The future is bright for build to rent

Collaboration between build to rent organisations and tech suppliers is going to be a key asset in the sector’s continued growth, and will be a key factor in whether it can leverage the opportunities currently ahead. There are reasons to be optimistic not just for those involved in the industry, but also for current tenants looking at alternative providers to offer a new joined-up market proposition.

To find out more about how Helpthemove supports build to rent developers with streamlining tenant move-ins, get in touch today.

1. UK Build to Rent Market Update – Q4 2023 (Savills)