Design: The Next Frontier for Private Rented Sector
July 23, 2013
Over the past year, we’ve seen the Private Rented Sector (PRS) go from a much-discussed conference topic to a burgeoning reality for UK renters. Institutional investment is finally appearing on the horizon, and developers are taking a real look at the value of the PRS in their planned schemes.
Throughout this process, much time and energy has gone into the discussion of funding, while relatively little has been spent on the role of design in these developments. As the ink dries on some of the UK’s most ambitious PRS deals to date, now is the time to look at how design will play a critical role in the viability of this distinctive housing product.
A different kind of product
One of the biggest differences between for-sale residential property and property for the PRS is the motivation of the buyer. Purchasers seek value from the property, its size, its long term potential and its location, while renters place greater emphasis on lifestyle. They seek living environments that afford them the quality of life and accessibility to locations they either can’t afford or aren’t interested in investing in over the long term.
In order to attract and retain residents, PRS developments must respond with living experiences that go beyond the unit itself. Common spaces, services, amenities, and local connections provide a chance to differentiate from other properties. They build community. They enable additional revenue streams.
In broad terms, good design helps to drive value through the entire development, facilitating seamless operations and management and offering a cohesive experience for tenants.
Designing from the outside in
Successful PRS development starts from the outside and moves in. Renters, especially in markets like London, seek accommodation that gives them access to great locations and amenities like public transport and shops. It’s not dissimilar to what buyers seek, but PRS doesn’t breed the same levels of NIMBYism as the for-sale market.
This is good news for local councils as PRS can take advantage of challenging sites and development rights over other uses. Smart urban design and architecture provide great places to live by mitigating the adverse effects of these sites while embracing their advantages, forming convenient links to adjacent transport, retail and restaurants, and civic uses.
As a provider of a built-in, engaged and like-minded population, well-integrated PRS can help to regenerate communities by supporting a variety of uses at all times of the day.
Achieving big by designing smart
Unlike for-sale residential, which is purely a real estate play, PRS is an operational business. As such, it must be big enough to allow for the provision of high-quality service and management, a necessity in attracting and retaining tenants.
Achieving these targets doesn’t have to mean sacrificing the quality of the living environment: The nature of PRS enables creative design solutions like freeing units from structural grids, replacing penthouses with rooftops amenities that add value to every unit, and specifying durable, long-lasting materials.
In places where the PRS market is mature like the United States, construction is on average 10% less expensive than for-sale property—savings achieved in part through efficient and balanced design and well-considered materials.
Getting the right balance
Because renters buy into the entire living experience, competitive PRS buildings should offer a sense of home from the time residents enter the property. From the standard to the truly unexpected, shared amenity spaces can add significant value to every apartment in the building.
Good design ensures these spaces are flexible, comfortable, multipurpose, and highly integrated so as not to sit unused, away from the action. Instead these spaces, which can range from self-catering communal kitchens and dining rooms to indoor/outdoor meditation spaces, become an extension of the units, offering tenants more living space in which they can pursue their interests and lifestyles.
The value of community within a PRS building cannot be understated: According to one of the largest US multifamily operators, renters are 75% more likely to renew their leases if they have a friend in the building and 90% more likely if they have two friends.
The demographic and psychographic profile of a typical renter in London is often a young professional who values social interaction and community. PRS development can capitalise on this quality by offering opportunities within the environment for social interaction. From lobbies and club rooms, to inviting and well-lit circulation spaces, well-designed PRS buildings can encourage incidental connections among residents.
Providing variety to build loyalty
In addition to community, variety helps to build loyalty and increase tenancy lengths in PRS developments. Buildings that offer a range of unit types are better positioned to support tenants as their lives change over time, allowing them to grow in place as their incomes increase.
In addition to providing a range of unit plans, good design can create flexibility and adaptability within units, provide distinctive amenity space geared toward specific demographics, and create a strong sense of place.
Building in efficiency
Although the quality of space and location matter greatly to renters, research shows that rental cost is almost always at the top of their lists of priorities.
Unit plan design can help to keep payments within comfortable and competitive ranges for target markets while still providing an aspirational “wow” factor. By maximising views, light and visual distance, and focusing on multifunctional spaces and impactful memory points, good design can turn even space-restricted units into highly desirable places to live.
Management and service play key roles in establishing a competitive PRS offer. Good design supports service in a way that’s similar to the back-of-house provision in a hotel: Spaces must be provided to enable staff to easily handle services like rubbish collection, cleaning and maintenance, furniture storage, package delivery, and cold storage.
Equally important are front-of-house spaces. Concierge services and lease sign-up and renewal should be provided in an environment that’s inviting, friendly and comfortable for the resident, and enables staff to provide the best possible customer experience.
With lifestyle such an important piece of PRS, a rental development must reflect an understanding of its market and offer an environment and service package that respond to its needs. A strong brand can make the difference in building loyalty among renters and must be consistent and coherent from start to finish.
How a renter perceives a property begins with the initial online search for a flat, continues through the face-to-face leasing process, and extends to everyday service, programming, technology and social media interaction, and environment. Design can help to support this purpose, creating a cohesive place that expresses relevant brand values and informs the choice of amenities, marketing, service and other touchpoints integral to the living experience.
Designing for the future
As more PRS developments come on line, architects and planners will be challenged to respond in ways that are appropriate to the product and the market. Simply recreating a for-sale development will not do: In order to truly capture the interest and loyalty of renters, make positive contributions to communities, and change the perception of rental, we must set new standards for design and define a strong future for PRS in the UK.