Is letting switching from a ‘product’ to ‘service’ model, just like Netflix and Spotify?

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Is letting switching from a ‘product’ to ‘service’ model, just like Netflix and Spotify?

News : Estate Agent News

Jonathon Ivory of Atlas Residential shares his insights into how this evolution mirrors that of the rental sector in the US and considers how Build to Rent accommodation can accelerate the experiential elements of renting in the UK.

The UK’s private rented sector continues to grow, now accounting for 20% of all households in England (totalling around 4.7 million homes, according to the latest English Housing Survey). The sector itself is changing, as government tinkering with tax rates and regulations has made buy to let a less attractive proposition for landlords.

According to RICS’ July 2018 survey, 22% more respondents have reported a fall in New Buyer Instructions, making it eight consecutive quarters of decline. At the same time, Build to Rent is coming to the fore and resulting in changing customer perceptions and expectations.

Build to Rent is still a fairly new concept in the UK. Many private renters would be unfamiliar with the term. However, word is spreading among residents regarding new developments that come with a host of added amenities, from spacious communal lounges to on-site cafés and roof gardens. Thus, while many renters aren’t familiar with the term ‘Build to Rent,’ they are beginning to appreciate the concept.

And, just as we’ve seen consumers move towards a ‘subscription society’ approach with their television and music consumption, this is now having an impact on other areas of daily life. Indeed, Netflix and Spotify have paved the way for a fresh take on the private rented sector, with Build to Rent developers seeking to provide superior facilities and services that have a subscription ethos at their heart.

This change marks a fundamental shift in the UK’s private rented sector. As more Build to Rent developments emerge, residents expectations will continue to change. For example, Atlas manage a property in Southampton called Bow Square on behalf of Rockspring, a Patrizia company, which has created a buzz in that market as a result of its superior living experience.

Residents enjoy the use of an on-site club room, gym, yoga studio, and well-conceived communal outdoor spaces, including a barbecue area – all in a convenient city centre location between the high street and Ocean Village. With six staff on site attending to their residents needs as well, Bow Square is a working example of the way in which rental accommodation is moving from being a product to becoming a service.

Contact with a property’s landlord used to be a rare thing indeed, only taking place at contract signing time and if something went wrong with the property.

Now, on-site staff are front and centre at Build to Rent developments. They’re available for everything from a simple, cheery “good morning” as residents head to work, to signing for parcels, dealing with queries and arranging any required maintenance services.

Their presence is playing a key role in moving rented properties from products to something more closely resembling a subscription services model.

Build to Rent operators like Atlas Residential have seen this shift take place in the US already through the Multi-Family Housing model. Our experience across the Atlantic is now proving invaluable in the UK.

Putting customer service at the heart of the accommodation we develop and manage is one way that we are effecting this change. We look at every element of the site from the resident’s perspective, building a cohesive lifestyle experience rather than a faceless product. It’s about creating a site that has a character all of its own, backed by a superb, subscription-style service offering – that’s the future of rental accommodation in the UK.

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