Build to Rent 2024: How Landlords Can Meet Tenant Demands

Build to rent landlords & tenants: The ongoing cost-of-living crisis impacts what renters seek in a property, going beyond the property’s features. Fred Lerche-Lerchenborg, CEO of Lavanda, foresees the rental trends emerging in 2024 as tenants adjust their priorities. The “Generation Rent” trend is growing, with more individuals renting homes for extended periods. This shift is driven by various factors, such as escalating property prices, stagnant salaries, more stringent borrowing requirements, and higher debt levels. Approximately 8.5 million households in the UK are renters, with over half of these in the private sector.

Renters face challenging economic conditions marked by intense competition and limited affordability. However, renters are selective and seek good value for their money; they won’t just settle for any available property. Landlords and property managers who prioritise adding value through services that enhance convenience and ease of living will stand out with more competitive and appealing offerings.

According to Fred Lerche-Lerchenborg, CEO of Lavanda, here are four key trends expected in 2024:

1. Flexible Leasing Arrangements

Flexible leases offer advantages to both landlords and tenants. While long-term leases traditionally provide landlords with stability and predictability, aiding in financial planning and management, they may not always be the most practical in the current economic environment.

With renters becoming more conscious of their spending, there is a risk for property operators of having unoccupied units because potential tenants are hesitant to commit to lengthy contracts. This can lead to reduced occupancy rates and negatively affect the Net Operating Income (NOI).

On the other hand, short-term leases provide tenants the flexibility and freedom to move according to changing life circumstances. For landlords, offering flexible leasing can be financially beneficial as they can charge a premium for this convenience. This creates an incentive for property managers to provide a variety of leasing options to cater to different needs and preferences.

2. Subletting Clauses in Rental Contracts

The practice of subletting your residence while you are away is becoming more common, offering tenants an opportunity to earn additional income. This extra income can help cover travel expenses or make their rent payments more manageable.

In 2024, a growing number of UK landlords and property managers are expected to start including provisions for subletting in their rental agreements.

Landlords can implement specific guidelines to maintain a degree of control and alleviate concerns about subletting. These might involve setting a maximum duration for sublets, restricting specific categories of guests, and imposing a fee for subletting arrangements.

3. Physical and Mental Wellbeing of Tenants

Given the increasing trend of people working from home, either full-time or on a hybrid schedule, it’s essential for property managers to foster a conducive and supportive living environment for residents. This can be realised by developing mixed-use properties that include on-site gyms, coworking spaces, and social areas for community interaction.

Such amenities enhance the appeal of these properties over competitors lacking such facilities. Additionally, landlords can justify charging higher rents due to these added value features.

4. Technology is Key to Happy Tenants

In 2024, landlords are expected to adopt a multichannel approach to customer service. Recognising that tenants have different preferences for interactions, whether for rent payment, maintenance requests, or general communication with staff, offering various communication channels allows tenants to choose what works best for them in terms of convenience and timing.

Resident apps are becoming more widespread, facilitating this level of choice for tenants. These apps often incorporate AI-powered chatbots or virtual assistants, encouraging tenants to use self-service options, which frees up human staff for more complex issues. Additionally, AI technology can streamline routine processes like check-in and check-out, further improving the tenant experience.

Contact Build-Zone for a Build to Rent Structural Warranty quote today.

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References:

https://btrnews.co.uk/how-can-landlords-meet-the-expectations-of-tenants-in-2024/