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<\/figure>\n<\/div>\nStarting the presentation Cara delves into the pressing matter of the housing shortage within the UK. She highlights that \u201cto comprehend the importance of scale, it is crucial to examine the current market landscape,\u201d and further states that \u201cthe housing shortage in the UK demands immediate attention.\u201d<\/p>\n
Recent statistics pulled from a report conducted by Savills reveal that over \u201c\u00a34 billion was invested in the BTR sector last year, with \u00a31 billion invested in the last quarter alone.\u201d<\/a> These figures underscore the significant appetite among investors for scaling up. However, despite the high investments, \u201cthere is still a shortage of approximately 4.3 million homes in the country, a situation that extends beyond the Northwest region.\u201d<\/p>\n Factors contributing to this shortage include \u201clandlords\u2019 withdrawal from the rental sector \u2013 causing over 330,000 buy to let redemption of mortgages since 2016.\u201d Private property owners who are coming to the end of their fixed-rate mortgages are now having to refinance at an increased rate. This results in the second contributing factor towards the housing shortage, which is \u201chigher rental costs for the tenants.\u201d Lastly, new regulatory changes within EPC requirements as well as Capital Gains Tax allowance in the Autumn Statement, means we are likely to see greater urgency to sell \u2013 further widening the gap in the housing shortage.<\/p>\n But, with net migration figures on the rise, \u201cpartly due to the results of the worldwide conflicts and also accelerated by student migration,\u201d the demand for housing is further amplified. Therefore, addressing this shortage requires a keen focus on scale.<\/p>\n The advantages of scaling in the BTR sector are multifaceted. Economies of scale, for instance, allow BTR operators to leverage the benefits of bulk purchasing, resulting in lower costs for renters. Cara states that by negotiating national contracts for services and products such as maintenance, operation and heating supplies, \u201cOperators can offer more affordable rental rates to tenants.\u201d She emphasises \u201cBTR is at an above average price point,\u201d so without this affordability factor which scale provides, BTR would not be able to expand and ensure that renting remains an accessible, viable option for individuals.<\/p>\n From an investor\u2019s perspective, scale offers attractive opportunities. \u201cNot only are they the enablers of scale, but investors seek to deploy significant capital\u201d and reap substantial returns on their investments. Scaling up BTR portfolios enables investors to achieve these objectives while also contributing to addressing the housing shortage within the UK.<\/p>\n In addition to economic advantages, scale brings both environmental and social benefits. Reflecting on an event attended in the past, Cara shares with the audience a statement made by Anne Kavanagh, CEO of Telford Homes, who stressed, \u201cAs we scale, we must not only be responsible actors and serious about sustainability, but we also need to start considering the social and governance in ESG.\u201d<\/p>\n This statement goes on to further emphasise the notion that scale not only addresses affordability but also improves the well-being of communities. Scale can help benefit tenants, as it allows institutional investors to provide security of tenures and address the cost of living within larger developments. But by scaling up, BTR providers can also offer and \u201cimplement shared cost schemes, which consequently help to reduce cost, improve living standards and tackles the housing shortage.\u201d<\/p>\n Technology plays a pivotal role in facilitating the scalability of BTR developments \u201cby helping to reduce friction in operational processes and improving the renter experience.\u201d Cara highlights that the rental market is a transactional business, \u201cIt\u2019s more than about the design and the amenities. It\u2019s about the touch points that help convert that prospect into a tenant.\u201d Therefore, by leveraging technology, \u201cBTR operators can streamline tasks and reduce pain points,\u201d as well as \u201cenhance their efficiency and effectiveness of large-scale operations.\u201d<\/p>\n This includes providing a seamless renter journey, from decision-making to ongoing engagement and retention. However, Cara notes that it is essential to balance technology and the human touch. While technology can enhance operations, it should not overshadow the importance of personalised interactions with renters, which can further ensure the brand\u2019s character and community engagement remain consistent.<\/p>\n Cara wraps up the presentation by highlighting the challenges that BTR operators will face with scaling. One such challenge is maintaining brand consistency. As BTR operators expand their operations geographically, it becomes essential to preserve the unique character and community feel of each development. Balancing the need for consistency with the desire to adapt to local contexts requires careful consideration and strategic decision-making. As \u201cdevelopers become more process-driven the challenge for them will be to maintain that soft touch that makes BTR special.\u201d<\/p>\n Another challenge lies in sustaining a value-driven operation. When scaling, developers \u201cmust have a scale mindset during the early stages\u201d and throughout the development process. This ensures that decisions align with the long-term goals, and better strategic choices are made regarding \u201cemployee recruitment and the sustainability of building projects.\u201d Adopting a scale mindset not only plans for growth and helps to avoid difficulties when expanding operations in the future, but it also helps providers meet their renters\u2019 demands and values \u2013 which if lacking can lead to tenants leaving. Thus, \u201cIt\u2019s not just about the building, BTR providers need to demonstrate the right values, the right culture, if they wish to maintain their residences.\u201d\u00a0 \u00a0<\/p>\n Finally, system architecture should be a key consideration. \u201cScalability should extend beyond technology,\u201d it shouldn\u2019t only deliver enhanced business decisions but also provide consistent customer experiences, across all developments. It is therefore essential to establish a robust and scalable system architecture, which is supported by advanced technologies but also allows operators to deliver.<\/p>\n Following her presentation, Cara joined a panel comprising of industry experts \u2013 Shannon Conway,<\/strong> residential director of Glenbrook<\/a>, Quentin Keohane,<\/strong> director of Falconer Chester Hall<\/a>, David Mawson,<\/strong> chief executive of Placefirst<\/a> and Dr Penny Clark,<\/strong> director of Conscious Coliving<\/a>. Together, they delved into the future prospects and developments within the rental market.<\/p>\n Spotlight takeaways included:<\/p>\n \u201cThere\u2019s still not a great understanding in the rental market that for certain people, they might value other things such as social connections and integrated neighbourhoods.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cPeople are wanting to live in high-quality homes, which are energy efficient and which create communities.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cWe need to start planning around tenants\u2019 lifestyle as opposed to just where they live.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cYou\u2019ve got to listen to the residents and get their feedback to understand what was good, what can be improved and what is going to be used and taken into account for the future.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cProviders need to make sure that the products they deliver meet the needs of residents and communities but are also flexible enough to be reused and changed as we go forward.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cDevelopers need to make sure that what they are working on now is going to be applicable for five to 10 years and is going to look as good as it did on day one.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cFuture properties need to meet demand and must stay desirable. That\u2019s the key thing wanted by the resident.\u201d<\/em><\/p>\n<\/blockquote>\n \u201cWhether you\u2019re developing apartments or houses, as long as you get the product right, there will certainly be demand.\u201d<\/em><\/p>\n<\/p>\n<\/blockquote>\nAdvantages of Scaling in BTR<\/strong><\/h2>\n
The Role of Technology in Scale<\/strong><\/h2>\n
Challenges of Scale<\/strong><\/h2>\n
What Is Next for The Rental Market?<\/strong><\/h2>\n
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