Build-to-Rent was booming before the pandemic struck, with investment in the sector hitting an all-time high. Unfortunately, Covid slowed everything down somewhat, as lockdowns made construction harder to complete, and already-live communities had to close their social spaces.
Even with the issues caused by Covid, the sector has bounced back much quicker than anyone anticipated. Investment is back on the rise, with Legal & General investing more than £100m in a second development in Birmingham. Coronavirus lifestyle changes could also play into the hands of Build-to-Rent.
So how has Covid affected Build-to-Rent, and what does the future look like? That’s what we’re finding out with this guide dedicated to the impact of Covid on the sector and why the future looks bright for Build-to-Rent.
The Covid effect
National lockdowns and social distancing significantly impacted economic activities for most industries, including the lettings market. Prior to the pandemic, there were 150,000 Build-to-Rent homes either completed, under construction or greenlit.
And while Covid slowed down some of those new homes, the overall picture was a positive one. Completed Build-to-Rent homes increased by 23% in 2020, showing the sector’s appetite for growth.
London saw an 8% rise in Build-to-Rent homes year on year, showing resilience in the sector when there was plenty of uncertainty around it. One of every five homes completed in London in 2020 was a Build-to-Rent community.
Changing lifestyle habits
A community-led lifestyle is one of Build-to-Rent's biggest selling points. However, the lockdowns and social distancing have made it harder to champion an idea of togetherness when people can’t physically meet.
As a result, many communities had to adapt, close their social spaces, and forge that sense of togetherness through virtual events. Now that we are coming through the other side of Covid, the need for social interactions will likely only increases.
Therefore, Build-to-Rent communities offer the chance to embrace the new normal and remember what it’s like to live in a thriving local community. As more social spaces re-open, the appeal of Build-to-Rent should see renters seek a more community-driven lifestyle as they plan to make up for lost time.
A hybrid living approach
The way people work has changed forever due to Covid, and it’s hard to envisage anything but a hybrid approach to working going forward. That means more time spent working from home and less inside an office.
Build-to-Rent is set up to cater to new working behaviours, as many communities offer a functional space to work alongside convenient access to local cultural and leisure amenities. That means residents can enjoy a working space that effortlessly fits into their lifestyle.
It gives people the option to choose to work in their homes, at one of the onsite co-working spaces or their company’s physical office. Build-to-Rent is giving renters options at a time when they want more flexibility.
Strong demand set to continue throughout 2021
For further proof of the robustness of Build-to-Rent, you only need to look at the sector's performance during Covid. A recent report shows that 95% of rent was collected for Build-to-Rent homes compared to the 80% levels found in the commercial sector.
Residential investment typically remains robust in times of uncertainty. And Build-to-Rent has shown that it’s an important asset class that can withhold the strain of something as significant as a worldwide pandemic.
A bright Build-to-Rent future
While a few Build-to-Rent professionals may have held their breath when the first lockdown was announced, any concerns have quickly been put to bed. Build-to-Rent thrived during the pandemic and looks set to grow even more exponentially as we head into a post-Covid world.