By Natasha Anslow, Co-founder and Director, Philosophy
The latest report from the Association of Residential Letting Agents (ARLA) shows that demand for private rental sector property is outstripping supply: further evidence for an accelerated interest in the sector. The number of properties has fallen to its lowest level for 12 months, while levels of stock in the private rental sector have suffered a month-on-month fall of five per cent in January 2016. What is more, an additional 1.8m households are expected to enter the private rental sector over the next ten years.
Meanwhile Telford Homes recently pre-sold a residential development in north London to housing association L&Q for £66.75 million, further demonstrating increased interest in the private rental sector. Of the 156 homes in the project on Caledonian Road, 96 are PRS stock.
Commenting on this latest transaction, Jon Di-Stefano, chief executive of Telford Homes, said he expects similar projects to:
“Form an important part of the group’s balanced sales mix going forward.”
The previous week we learnt that Countryside, in partnership with Sigma Capital Group and Gatehouse Bank, has committed to developing about 900 more homes for private rent across Greater Manchester and Liverpool. And at the end of January Grainger announced an overhaul of its business as it looks to focus on PRS.
This reflects the growing belief among many young professionals that rental offers better value than purchase. However, there is a lingering negativity that surrounds renting as a whole. Complications around landlords, leasing issues and value for money will always mean that rental developers will struggle to compete with sales in terms of long-term appeal.
So, there is an opportunity now, in these early stages, for developers to establish a brand for the PRS sector that challenges this perception, and helps them achieve maximum return for their investment in this fast-growing sector. But how to do this?
The recent work by London property developer Quintain to create and deliver a brand and marketing strategy for its PRS brand, Tipi, is instructive. The first buildings in Wembley Park have launched in February, and residents will be arriving in March.
Tipi’s brand and marketing is aimed at young professionals and centres around positivity and aspiration. It seeks to dispel the perception that renting is a second-class, alternative option for those who cannot afford to buy. It highlights the convenience of both a location which is just two stops on the tube to Baker Street, and also a lifestyle where utility bills are included in the rental price, and parking, laundry and cleaning are all available at the click of a button.
The images, language and design used in the Tipi collateral are bright, aspirational and of high quality, depicting the desirable and flexible social lifestyle on offer, mixing simplicity with sophistication.
Harriet Pask, Corporate Communications Manager at Quintain, comments:
“Tipi is our representation of the future of renting for London professionals. This style of living is already established, accepted and embraced in cities such as New York, and it’s time we started delivering positive, confident messages about this trend here in the UK as well.”
Her firm is leading the way on this; it cannot be long before other property firms look to emulate the success of the Tipi brand.