Ten years on from the Montague Review: What’s next for the Build-to-Rent sector?

Helen Streeton, Partner and Head of Build to Rent gives her key takeaways from the British Property Foundation and Get Living breakfast event, hosted by FTI Consulting on 19 October 2022.

It was fantastic to attend this engaging and informative seminar, with excellent hosting by Giles Barrie and a very informed and energised panel made up of:

• Ian Fletcher, Director of Policy, British Property Federation
• Rick de Blaby, Chief Executive, Get Living
• Alex Greaves, Head of UK and European Living, M&G
• Jacqui Daly, Director of Residential Research, Savills

This made for a very interesting review of the last ten years since the Montagu Review, and a look ahead for the BTR sector. Here are five key takeaways:

• The asset class has grown from a relatively immature market, which was feeling its way and described as seeming “bonkers” to many in the real estate sector, to a best in class asset in a relatively mature market place.
• Despite significant investment over the period, some supply side help from the government and significant units delivered, demand continues to outstrip supply which is putting upward pressure on rental levels.
• Despite rising construction costs which impact the cost of delivery, and the ever- increasing list of requirements from funders and occupiers alike, in particular around ESG, there seems to be no slow down in the appetite for the product. This is based on strong rental growth which is expected to continue for some time given supply and demand conditions.
• Nicola Sturgeon has announced a rent freeze in the rental market in Scotland until March 2023. It remains to be seen whether this will be a cap on rent rises or a freeze itself. Panellists felt it was unlikely that this strategy would be rolled out here in England, due to the further excess demand this creates in the market which cannot be met, but that a cap on rent rises might be something which would protect tenants and landlords alike.
• Placemaking and infrastructure remains at the heart of the build to rent offering alongside high end amenity space.