Vivienne Neale, Author at Howsy

All you need to know about the Single Family Housing Investment Class

In this paper we are considering the emerging Single-Family Housing (SFH) sector. We then contrast it with Build-to-Rent as an investment class. This means exploring the operational differences. We are also looking at the opportunities and also its potential. Also we will be making a distinction between ‘Suburban Build-to-Rent’ (SBTR). This can also include low rise apartment blocks as well as houses. This brand new paper is looking exclusively at SFH’s.

People need more space and a place to bring up families. They need Single Family Housing

Who were the early pioneers of Single Family Housing?

The BTR catalyst is said to be Sir Adrian Montague’s 2012 government-sponsored report, “Barriers to institutional Investment in the Private Rented Sector”. Subsequent government support packages are also significant. This includes the HCA BTR funds 1 & 2 including the creation of the PRS Task Force. Whilst this may be broadly true, there were earlier pioneers. Most notably Fizzy Living incorporated prior to Sir Adrian’s report. Delancey plc & Qatari Diar in 2011, also signed a £557m deal to take over the Athlete’s Village (Now known as the East Village) following the 2012 Olympics.

Single Family Housing continues to grow

Single Family Housing is flexible and is moving to the suburbs

The argument for ‘scale’ in the Single Family Housing sector is very well-rehearsed and people understand it. Since the beginnings of the British Property Federation (BPF) and Savills BTR index in 2016, the average scheme size has grown. In fact, it continues to grow. An alternative source, Knight Frank & Homeviews, report that the average scheme size for completed schemes stands at 212 homes. However, those under construction and in planning stand at 264 and 320 homes respectively. This data is suggesting Single Family Housing’s growth is broadly in line with the trend that was identified by the BPF and Savills.

Single Family Housing will move away from the cities

To be clear on the numbers: The BPF and Savills report on schemes greater than 20 homes in size. Knight Frank & Homeviews use a scheme size threshold of 75 homes and above.

Broadly speaking, scale tends to run hand in hand with density. Density equates with urban environments. Therefore, we have seen most BTR schemes located in London or regional centres. This correlates with target cohorts and building typologies. The BTR sector identifies the service provision as necessary and appropriate. Single Family Housing creates a different perspective.

Scale does have operational advantages and economies. Cities and large towns. are favourite locations These have populations and cohorts sufficient to support a BTR development or, indeed, competing developments.

The breadth of SFH delivery has the advantage

There are no similar constraints within Single Family Housing. Compare UK BTR development with UK housebuilding development. densely populated areas see lots of BTR developments. House builders are able to build more broadly and more evenly across the UK. This breadth of delivery has the advantage of offering greater opportunity. The disadvantage is “investible scale”. That is: scheme sizes of sufficient size to attract institutional attention.

But, as our research shall demonstrate, SFH investible scale cannot be judged against BTR investible scale. The two asset classes are very different and the approaches to each are not directly interchangeable. However, they are complimentary.

Download the white paper and sign up for our SFH webinar

If you want to find out more about this investment class download our paper and sign up for the latest Single Family Housing webinar with key speakers on 30th November 2021 at 10am here.

Rental renovations can transform your income and tenant interest — When undertaking rental renovations think about furniture choice if your property is furnished

Does your rental need to be renovated?

You might think rental renovations are an unnecessary landlord expense. But have you considered how much an unrenovated rental might be costing in lost revenue? If your property is not let for a month, or even longer, consider how much that would cost.

For example, if your property is advertised on the market for £1,245 pcm, every week it stays on the market you are losing £287.30(!!) in potential income.

We all know that every rental need to wash its face financially, of course. However, rentals are also destined to be someone’s home. So, they deserve the best they can afford. Therefore, consideration of your customer is a key part of the rental renovations equation. Here is a list of potential actions for landlords that are considering a rental renovation. This might be the perfect opportunity to bring a fresh property to the rental market in 2021.

1. First look critically at your property when a renter moves out.

How will it look to the next prospective renter? Attractive and inviting or tired and unappealing?

2. Create a list of everything that needs attention.

This might include faulty locks to ill-fitting windows. Then prioritise the repairs. Ideally, a property should be fully functioning, in every sense, for any new tenancy.

3. Understand your target renter.

What are they looking for? Do other properties in the same price bracket within the local area charge similar rent? What amenities do these properties have? Does your property currently fit the bill? What’s missing?

4. If your property lies within a school’s catchment area

And it is a suitable size, then you’re likely to attract families. Is there a bath? Is there sufficient storage? If appropriate, can you make the property more flexible? Will it accommodate the changing needs of families? The aim is to keep good renters from moving on. Happy renters tend to stay longer in a property they like.

5. Next, when you have listed priorities then it’s time to research your property thoroughly.

Therefore, what you are offering should fit the kind of renter that might view. There is little point in offering something inappropriate that will not yield any return. If your rental renovations become too costly they will impact your bottom line

6. Having listed your priorities then prioritise that list further.

Furthermore, undertake work that will make the biggest difference. Can you drop a kerb and provide parking? Will excellent storage be an attractive feature? Will a breakfast bar offer flexible dining? Would building an additional partition wall or even removing one make an exciting transformation for your property?

7. Do remember, during the pandemic, outside space was often seen as a priority.

If you have any outside space making that look low maintenance but super attractive. It can be the difference between renting and not renting.

8. Certainly, be hyper-critical of the main areas of your property.

Certainly, kitchens and bathrooms can make or break a property’s desirability. You can add money to your rental by ensuring kitchens are clean and appliances are modern. Neutral colours in bathrooms, a new shower curtain and storage can really add value to the rental rate and ensure your rental renovations repay your efforts.

Landlord renovations 16 top tips — A kitchen renovation can seal the deal for a new renter

9. Flooring that looks stylish and cleans up well can transform hallways and rooms in general.

Of course, neutral tones will allow renters to add their own belongings to create a cosy home. Appealing to the masses will hit the mark rather than appealing to your own personal taste.

10. Above all, set your budget and what the best way is to achieve the most change.

Undertaking DIY projects on a rental can be a way to save money. However, the finish must be first class. A poor job will cost more money in the long term. Do not attempt changes to boilers, gas fires, electrics or plumbing if you are not qualified. A rental property needs to be compliant. As a landlord you have a responsibility for your renters’ safety. More details on your requirements regarding gas safety are available here.

11. Do your best to renovate the rental property so it is fuel efficient.

Ensure pipes are lagged and loft spaces are insulated. Check windows and doors for draughts. But do ensure there is suitable ventilation. If you upgrade your property’s green credentials it will pay off in the long term. Homes that are expensive to heat will retain less value moving forward. Updating your EPC is also a positive consideration for new renters. Details of how to do this and its importance are available here.

12. Don’t over complicate the renovation of your property.

Remember the more complex the lighting or heating system the more capacity you are building in for repair.

13. Also, aim for quality where practical in your rental renovation.

A slightly more expensive click flooring or vinyl covering will last longer than a bargain basement finish. This will save you time, effort and hassle

A rental renovation should provide value for money — Cheap click vinyl flooring might be a short term economy in terms of rental renovation costs

14. Most importantly, work out the project management time required for your rental renovations.

It might cost less for you to undertake the work in terms of money. Yet a contractor might be far quicker enabling you to re-list your property much quicker.

15. Clean a flat or house thoroughly.

You need to set the standard, so a renter knows you take care of your property. It may well nudge any resident to reciprocate.

16. Finally, when your property is renovated to your liking then ensure that the quality of your photographs reflects its new style.

In addition, marketing your property is extremely important. The more effort you put into making the rental welcoming and practical the quicker a new renter will want to move in. Then they start paying rent.

Howsy, understands the importance of finding the ideal match for your property. Schedule a call with one of our team today. We can discuss how we can help match your perfectly renovated property, with a renter who will love it as much as you do!

Schedule your call here today.

Author: Vivienne Neale

Single Family Housing