The Intermediary – April 2025 - Flipbook - Page 48
SPECIALIST FINANCE
Opinion
Keeping track of
property trends
A
s with any other
investment,
developers and
investors must focus
on their end users
and strive to provide
people with places they are happy with
for a project to be successful.
First and foremost, that will
mean the location of a particular
development. And for the rental
market, which is where a lot of our
current deal flow is focused, it means
asking the following questions: do
people want to rent there, and for
long periods of time? How well is the
property positioned in relation to local
services and infrastructure? What
does it offer people, and is it value
for money and affordable long-term,
especially in a cost-of-living crisis?
This last one is complex, because
there’s such a thing as too many
facilities, and over time, this might
just equate to more expense. You’ve
got to get it right for your market,
understand it, and create something
with long-term, durable appeal.
Investors and developers – and the
people creating those spaces and our
communities – should look at how to
aract people to not only live in their
buildings, but to enjoy living there
and want to stay there. Something
sustainable in a financial sense that
offers what occupiers need, but on
balance, doesn’t require too much in
terms of additional service charges.
At the moment, given the way we’re
increasingly living as a country, we
are looking ahead to a more European
model – which is ironic aer turning
our backs on Europe politically! This
means greater investment in co-living,
the private rented (PRS) and Build to
Rent sectors, which provide spaces to
work, live, and relax.
We’ve all seen a huge trend towards
a mixed living and working from
home approach following Covid-19,
which le us all in a very different
sort of world. I don’t think we’re ever
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The Intermediary | April 2025
fully going back to the office, and
developers will need to plan living
space thoughtfully, so people have
good quality space to work from
home regardless of whether they’re
renting or buying.
It doesn’t suit landlords –
institutional or individual buy-to-lets
(BTLs) – to have too much churn.
They want tenants to be there for a
long time and to engender a positive
relationship with their customers.
Changing tenant demands
When it comes to changing tenant
demands, do developers need to
change their approach? It depends
on which segments of the market
you’re going into.
If we start with the co-living market
– which may well be the entry-point
for post-graduate living and working
in a new location for the first time –
you’re probably not looking for lots
of space.
What you’re looking for is
something that’s central, well located
for your work, and to live alongside
people with a similar outlook or of
a similar age group. These tenants
might want to live somewhere with
things going on nearby or in the
building – yoga classes perhaps, and
places to socialise and grab food and
drinks together.
Space inside the property may also
be less important – these tenants
probably haven’t yet accumulated
large amounts of stuff. Instead, they
may prioritise experiences and living
life as fully as possible.
On the other end of the spectrum,
those aged over 55 who are still
living in the rental market will have
different requirements. They will
probably have accumulated much
more, and maybe they won’t want
discos in their buildings. They want
space and accommodation that
complements their way of life.
We have to think through and
provide for different segments and
TOM BROWN
is managing director, real
estate at Ingenious
Developers will
need to plan living
space thoughtfully, so
people have good quality
space [...] regardless of
whether they are renting
or buying”
life stages with various sorts of
accommodation, and here the rental
market needs to play catch up.
Shift in perception
The property market, and specifically
investors, developers and lenders,
need to look at the PRS for the
provision of greater volumes of
traditional family housing, where
there seems to me to be a massive gap.
We must recognise that we need to
give people who are less likely to own
property than previous generations
something that’s right for them, and
that fits conveniently with where they
are in their lives.
Ingenious has heavily supported
these concepts, working with
developers and other counterparties
to fund the delivery of schemes
thoughtfully delivered for their
end users.
Rental market trends are changing,
and as an industry, we probably all
need to play catch-up.
Renting will be the future for many
of us throughout the various stages of
our lives, and the market must evolve
to meet those challenges. ●
