BTR Resident Experience Index
Resident experience can drive operational performance. Our index allows investors, developers and operators to understand the impact that design, management and satisfaction can have on the lived experience of their residents.
3 minutes to read
The total number of completed Build to Rent (BTR) homes stands at just over 122,000, having surpassed 100,000 earlier this year. A further 59,000 homes are under construction and 102,000 have full planning permission granted. As more new entrants are attracted to the sector, the way schemes are designed, delivered and managed is changing, with resident experience at the forefront of investor’s minds.
Consequently, BTR schemes are in high demand. Average lease-up rates have climbed from an average of 17 units per month for schemes which completed in 2020, to 47 for schemes which launched last year.
Resident experience can drive operational performance. Occupancy levels in existing schemes are also high.
It is through this lens that, last year, we created our BTR Resident Experience Index (REI), to quantify how schemes are performing from a resident perspective. The Index allows us to draw conclusions as to what “best-in-class” looks like and to understand how both individual schemes and the sector can improve.
Getting it right will drive investment metrics like occupancy and retention, lease up and rental income, as well as reducing costs and improving net operating income. The REI is, by definition, primarily inward looking, measuring scheme specific metrics like the number and type of community-focused services, management and resident satisfaction.
On average, our research found that schemes with the highest scores for resident experience can command a 14% rental premium over the local area. In contrast, schemes that scored lower for residential experience typically achieve rents that are 2% below the local average.
Resident Experience
The BTR Resident Experience Index scores 277 BTR schemes. Each scheme is put into one of five bands, from A to E, with A including the highest scoring schemes. Some 69% of schemes have a score of at least 60, placing them in Band B or higher.
We have identified commonalities between the top-scoring schemes to understand what best-in-class looks like. The average Band A-rated scheme has:
- Six community-focused services. These can include hosting resident events, having resident lounges, access to communal outdoor spaces, or concierges, all of which drive community engagement.
- Larger unit sizes, at 63 sqm on average, compared with 43 sqm for Band E schemes. This indicates that larger units support the resident experience.
- Better energy efficiency. Energy costs of £5.29 per sqm on average in Band A schemes – compared with £11.52 per sqm for Band E schemes. Band A schemes also have the highest EPC energy efficiency scores, at 84 on average (EPC B-rating), compared with an average of 71 for Band E (EPC C-rating). Cheaper utilities costs support resident satisfaction.
- Analysis of HomeViews review scores relative to our resident experience bandings show that the biggest difference in ratings between Band A and Band E schemes is seen in Facilities (Band A: 4.2, Band E: 1.7), Management (Band A: 4.0, Band E: 1.6) and Value (Band A: 4.2, Band E: 1.8), suggesting these are the most relevant factors driving resident experience.
Overall, the analysis identifies the key features that drive Resident Experience, with a focus on the internal factors that can be controlled, particularly at design stage. This includes amenity provision, unit sizes and energy efficiency