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Ascend Research Reveals Rental Premium For Single-Family Build-To-Rent Homes

  • Data shows 21% premium for SFBTR homes compared to wider PRS market
  • Average occupier tenancy at a single SFBTR homes is 960 days
  • ‘Vacancy gap’ between occupiers of just 17 days on Ascend-managed homes

New research from Ascend Properties, the UK’s largest lettings and property manager of single-family build-to-rent (SFBTR) homes, has revealed that properties in the asset class command a 21% premium over the wider private rented sector (PRS) market.

Analysis of Ascend and Office for National Statistics data showed that two-bedroom SFBTR homes have an average monthly rent of £827, compared to £683 in the PRS, while rents for three-bedroom SFBTR properties are £962, against £797 across the sector as a whole.

Ascend manages approximately 7,000 SFBTR homes, an estimated two thirds of the entire current asset class. Data from this portfolio for homes in the North West, Yorkshire & Humber and Midlands regions – where the vast majority of SFBTR homes are located – was compared with ONS private rental statistics1 for the same areas.

The higher rents demonstrate the premium residents are willing to pay for a home that is often superior to what is available within the wider private rented sector. Institutionally-owned homes are typically newer and more regularly upgraded, and as such usually hold EPC ratings within the top 10% of properties. In addition, they have been fitted out with built-in appliances that reflect renters’ needs, and benefit from efficient and professional management.

For two- and three-bedroom homes, there is a rental premium for single-family homes across all three regions, with the highest differential for three-bed houses in Yorkshire (27.1% higher):

The research also revealed that the SFTBR premium is growing. Rents for two-bedroom SFBTR homes are 11% higher than a year ago and 20% up on 2020; in the PRS as a whole, rents increased by 5% over the past 12 months and 13% in the past three years. Three-bedroom SFBTR homes have seen rental increases of 10% since 2022 and 15% compared to 2020 (PRS: 6% and 15% respectively).

Paul Borrmann, managing director at Ascend Properties, said: 

This research highlights the premium that residents are willing to pay to live in single-family BTR homes. Modern housing stock and professional, efficient management are great attractions to renters, and stand the asset class apart from the variable levels of service that residents experience in the wider PRS market. What’s more, the widening premium shows the growing reputation of institutionally-owned homes, an effect we expect to continue as the sector expands and awareness of the advantages of renting through single-family BTR grows.

Further analysis of Ascend’s dataset provide additional insight into occupier trends for SFBTR homes. For houses that have been rented out for a minimum of four years, the average occupier tenancy at a single SFBTR property is 960 days, while for Ascend-managed homes the typical ‘vacancy gap’ between one family leaving and another moving in is just 17 days.

Paul Borrmann added: 

The further analysis of occupancy trends demonstrates the importance of professional management on the success of a single-family BTR portfolio. By giving residents the highest level of service – be that swiftly rectifying maintenance issues or efficient onboarding of new arrivals – families are encouraged to stay in their homes for longer, and replaced quicker once they finish their tenancy. Effective management is all about maximising rental income, and Ascend’s data shows the approach that has made it the sector’s largest lettings and property manager.

1 Source: ONS Private rental market summary statistics in England, published 21st June 2023 

2 Source: Ascend Properties proprietary data

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