The Evolution of Innovation

The pioneering approach paid off: the BTR sector continues to provide outstanding service to its residents, who, according to the authoritative HomeViews survey, rank service more highly each successive year. 

As the BTR industry grows, so too does the challenge for operators to compete. And as BTR moves into new sectors, specifically BTR suburban communities, that challenge is intensified. 

Four areas in which the BTR sector has pushed innovation to new levels are construction, shared spaces and design and technology. In each, there is much that BTR suburban communities can learn from earlier BTR schemes. 

Construction

Designers of BTR apartment blocks in the UK are increasingly finding that modern methods of construction (MMC) are ideal for delivering fast, high quality, flexible apartments. Greystar’s 10 Degrees in Croydon comprises 550 units, spread across two towers, which makes it the largest modular constructed building in the world. In the BTR suburban communities sector, Apache Capital’s Present Made platform is investing £1.6 billion in 3,000 modular-build homes. 

While the Build to Sell (BTS) market often resists MMC because it can prevent homeowners from obtaining a mortgage, this is not a concern of the BTR sector; for the institutional investor, MMC better addresses sustainability criteria and is fast and cost-efficient. 

In apartment blocks, modular build has been used to introduce flexibility: as residents’ needs change, flexible room dividers can convert a two-bedroom flat into a one-bed or vice versa; during the pandemic, an open plan ‘party’ flat could be divided to introduce separate home working spaces. 

In BTR suburban communities, MMC offers further advantages because floorplans of houses are less restricted than those of flats. The same potential to adapt the room layout exists, but so too does the opportunity to introduce an additional pod to a home – perhaps a home office, gym or sun room. Rooms can arrive on the back of a lorry with fixtures and fittings complete and can be slotted into place within hours. 

Furthermore, modular homes are popular because their substantially increased thermal insulation reduces heating costs. At a time when many people are switching to homeworking on a permanent basis and energy costs are rising, MMC can offer increased space and reduced running costs. And with significant projected growth of suburban BTR, economies of scale will result in this being done quickly and efficiently. 

In 2021, 6,500 units BTR units under construction (22% of the total) were being built using MMC 

Source: JLL, 2021

Shared spaces 

Shared spaces are among the primary attractions of traditional BTR. Initially these included rooftop terraces, cafés and bicycle storage. Following extensive customer research and some creative thinking, this has extended into rooftop pools, gyms/exercise studios and co-working spaces, even a ‘Zoom Room’ with deliberately tinted windows to give tenants a sun-kissed glow! 

The 2022 Homeviews report assessed which facilities tenants of the Top 10 BTR schemes valued most and found that communal indoor space (along with concierge, gym and events) ranked most highly.

As BTR suburban communities attract a different demographic to traditional BTR (albeit perhaps the same individuals, at the next stage in their life), they cannot simply replicate these benefits. But the reason purpose-built family schemes thrive in the US and elsewhere is their lifestyle-enhancing attributes. Young families are undoubtedly attracted by the opportunity to socialise with other families but may choose to do so at an adventure playground, in a beauty spot, or on an allotment. The success, on a social level, also comes as a result of a scheme’s composition – for example the inclusion of later living units to allow for multi-generational living. Place-making is important, too – such as maintaining a safe environment for active travel by locating car-parking on the edges of the development. 

Perhaps the greatest challenge in providing services for a BTR suburban community is timing: the full complement of services and amenities must be available from Day One. This requires an up-front investment in any commercial, leisure and ‘third’ spaces. A build schedule which priorities other uses over homes is rare in the traditional build-out of new BTS schemes, but is imperative in BTR suburban communities to attracting premium rents. 

Design

When assessing the design of BTR buildings at the most fundamental level, there are three distinct types: those which have been developed specifically for rent (‘true’ BTR); those that were originally built for sale but converted to lets; and those that have been converted from an alternative use, such as an office building, often under permitted development rights. 

The 2022 HomeViews report found that the current design rating for BTR was higher than previous years and compares favourably to BTS developments. It also found that design of BTR was ranked higher than design within the PRS more generally, and especially within office to residential conversions. 

No fewer than 88% of residents gave their BTR development a design rating of 4/5 or 5/5. Comments focussed specifically on the design of homes, with 39% describing their flat or development as ‘modern’ or ‘new’. The communal areas were a firm favourite, along with furniture and balconies.

BTR suburban communities offer infinite opportunities for innovation in design: from the homes themselves to the architecture and interior design of shared interior spaces, and the landscape design and street furniture of external spaces; also the way in which the scheme interacts with woodlands and the wider community.

Technology

Another area in which BTR excels over BTS is tech. Advanced technologies for the smooth running of buildings include sensors which analyse resident use of shared spaces, waste recycling and heating requirements. From a management perspective, apps can be used to alert tenants to parcel deliveries, cleaning schedules or one-off services. Apps can allow them to book a desk or meeting room, request services such as furniture assembly, pay rent, arrange insurance, and of course provide feedback. Technology also complements social interaction, in providing apps to announce social events or to facilitate tenant communication.

The same technological advances can apply to BTR suburban communities, which would naturally feature high-speed broadband. As technology advances, it can provide further lifestyle-enhancing benefits. For example, it has been proposed that biometric data could be gathered and shared with resident health and wellbeing professionals. As John Badman, Principal at architectural practice CRTKL, writes in an article for BTR News, BTR communities, ‘can and should be playing an active role in the health and wellness of those that inhabit them. By providing access to community-based telehealth, multifamily and Build to Rent developments can have a positive, tangible, and lasting impact on resident and community health. He goes on to describe how in-house technology can manage delivery surges, keeping perishables and takeaways at the correct temperature, and providing access to driverless vehicles, automated bots and air taxis.

Conclusion

So it’s clear that the many innovations within traditional BTR can be taken up by BTR suburban communities to significantly enhance the user experience, offering a level of service which the BTS sector would struggle to match. 

The secret to making innovation work involves understanding the audience and positioning the offer accordingly, ensuring that service and lifestyle remains a high priority, making services available from Day One, and measuring tenant satisfaction to create an understanding of any issues quickly -which ultimately reduces churn. To create a scheme which offers something above and beyond that of a typical BTS community, physical and place-making aspects of innovation should be committed to at the planning stage. It’s also important to plan for change. Not all families consist of two adults and two children; blended families are increasingly common. Maintaining tenants means predicting their future needs, whether that may be an extra room or a new house on the same development; baby yoga or team sports; a school pick-up service or a car club. BTR suburban communities have the same capacity for innovation as traditional BTR, if not more, and will continue to evolve in areas which, even with most the attentive systems for reporting and analysis, we cannot yet begin to imagine.