We’ve now seen the delivery of 100,000 BtR homes, and a staggering £35 billion of investment by developers and institutions.

But not all schemes are the same, each vary by size, age and price point. Design quality also varies widely, and those offering superior management and facilities can command higher rents, given they tend to be ‘all-inclusive’. Typically, these schemes feature well-designed communal spaces that foster a sense of community, welcoming ground floor lobbies, concierge services, and amenities such as gyms and communal lounges. Rooftop gardens and co-working spaces are also becoming increasingly common.

Smart design is essential. A primary focus is on the layout of communal areas to maximise usable space and ensure ease of maintenance. Some buildings house upwards of a thousand residents, so easy access to building infrastructure is key to help minimise costs and disruption.

The rise of Generation 2

As expectations for BtR design evolve, newer and higher-quality schemes are emerging. These ‘Generation 2’ (Gen2) developments offer superior management and a broader range of facilities compared to earlier builds. Investors are growing more confident, and recognise the economies of scale that larger schemes provide.

The average Gen2 scheme comprises 340 apartments, compared to 187 in Gen1 developments. This allows larger schemes to offer facilities such as rooftop running tracks, pet spas, and keyless door entry systems. Access to these amenities is often included in the base rent, positioning these schemes at the higher end of local markets.

Apache Capital’s Angel Gardens in central Manchester was a trailblazer for this new generation. Delivered in 2020, the 466-apartment scheme set a new benchmark, offering top-tier management and unique facilities like a rooftop football pitch, a resident event schedule, and a bookable personal trainer. Since then, 46 Gen2 schemes have been delivered, continually raising the bar in their local markets.

Several investors have since followed suit, and the likes of Legal & General, Greystar, Get Living and Long Harbour have each set new standards of renting in their markets, with Gen2 schemes stretching all the way from Brighton to Glasgow.

Shifting consumer priorities driving scheme innovation

Convenience is crucial for today’s renters, a theme that has shaped the Gen2 BtR product. The quality of management is a significant focus, becoming a clear selling point for the sector. As a result, the resident experience is now at the forefront of investors’ priorities. Consumer awareness of professionally managed rental homes is also increasing, with renters better able to distinguish between new builds let by traditional agents or landlords and those operated by institutional landlords.

Investor confidence is strong in key markets such as London, Manchester, Birmingham, and Leeds, which have demonstrated robust rental demand. Schemes in these locations have experienced strong lease-up rates and consistent occupancy, indicating high demand for well-managed properties with a wide range of facilities.

The past decade has been eventful and successful for the BtR sector. Schemes are being delivered across a range of locations and price points, as the list of active investors in the market has grown. Gen2 developments will continue to push boundaries, responding directly to the needs of wants of UK renters. As more schemes come to fruition, the market is poised to continue attracting both investors and tenants alike.

Further information

Contact Guy Whittaker

Spotlight: Investment in UK Operational BTR