COMMENT When the pandemic hit, the UK’s build-to-rent sector was plunged into strict lockdown and a world of uncertainty. While BTR has continued to attract capital, it has transformed and now we are ready to share those experiences.
At the beginning, my phone rang hot from all corners of the world and facets of the sector, all hours of the day – investors, operators, suppliers, landlords, contractors. People wanted to know how long lockdown would last, what to do with amenity space, what health and safety checks should be carried out and if residents were paying rent. “What does furlough mean? How many foreign students do we have in the portfolio? Do we hold off submitting planning applications?”
As much as I could, I answered. But no one definitively knew, and we are still answering as best we can. The difference back then was that we were completely focused on one thing – sourcing the reality, ideas, intel and understanding of what was happening at the coal face.
Collaboration was key. What we were doing at Allsop was just as important as what everyone else was doing within operations, investment, consultancy, construction, design, funding and supply – we were sharing and learning together.
Silver linings playbook
Under the banner of the UK Apartment Association, we held weekly virtual forums. These sessions, I have been repeatedly told, were some of the most valuable collaborations and learnings within the BTR sector to date.
This was a necessary reaction to a crisis. We now recognise a silver lining as that can now be put to good use – for those already in the sector as well as new entrants – through the creation of the UKAA Best Practice Guide.
This draws upon that collective experience from operators, contractors, investors, owners, suppliers, professional advisers, developers and planners. We must use this experience and knowledge to lead stakeholders close to BTR, such as local government.
It is important that the UK’s best-in-class BTR experts showcase this expertise, as well as raise awareness of challenges and understanding of the cross-sector “why”, in order to promote efficiency and delivery. This transposes into better performance and ultimately investment return. No one component of the BTR sector knows all of the answers, and this is a way to continue the accelerated understanding and learning we experienced during a crisis.
Lockdown living
A year in lockdown has taught us so much about resident needs, but also the ability within the industry.
Consumers are more savvy about quality of living and working space. People have spent more time at home and they understand what “good” looks like. They understand the value of community and appreciate amenity, service and outside space more than ever.
Technology has always played an important part in BTR, from modelling demographics and viability through to day-to-day delivery. However, it truly came to the fore during the pandemic, enabling online communities, connectivity, reporting and tracking to understand the impact of the pandemic.
This was done across individual schemes and portfolios, with information shared across the sector, which ultimately helped maintain market confidence with developers, owners and operators. IT enabled the systems that provided the data that formed information that decided the course of action.
We have also seen a significant increase in the importance of ESG. During viewings today, many consumers ask about green energy usage, recycling and social or community initiatives. And investors are playing a significant role in progressing that ESG agenda, as they are held to account by their funders.
The next phase
Living and working habits are evolving and trends haven’t yet settled – nor will they for some time, owing to the nature of continued restrictions, isolation and vaccine or employer requirements. The challenge for developers and owners is attempting to pre-empt what the trends will be and how to future-proof the design of the built environment for an evolving consumer demand.
Exponential interest in BTR investment means there is considerable appetite for development. But funders want certainty of costs and delivery from a volatile supply chain still reeling from the disruption of the pandemic. I am confident that this will ease as we overcome the backlog of demand, Brexit impacts on labour and those capitalising on market opportunity.
The toil we all went through during 2020 is going to be put to good use – we owe that to ourselves and each other – by sharing best practice and raising understanding of the varied and dynamic component parts that make up this new emerging asset class.
Seventeen months on, my phone is still ringing (thankfully). But now, the subject of the calls is less about the uncertainty of the past and more about the certainty of what is coming next from the UKAA and the industry.
Lesley Roberts is president of the UK Apartment Association and partner for build-to-rent at Allsop
