Chatting with Andrew Teacher, the founder of Blackstock communications the other day, we spoke about which metrics are the most important and interesting for PRS/BTR developers. Reducing voids as much as possible seemed to be an area of key importance, either through specific area selection, or through choosing the right tenants.
It seems plausible to me that locations with higher numbers of ‘family age’ individuals, with relatively high income and where rental properties are in high demand had be the most inviting combination for prospective developers. Age being a factor because these individuals are less likely to move house, relatively high income because it means they can afford the premium on a BTR new build, and high demand measured by a low number of days on market for rentals.
Using the new REalyse Scout interface, I ran a search across the UK for areas where rented flats took between 9 and 30 days to let. Below nine days might bring up anomalous low volume locations, and above a month is simply too long to be considered a high demand area. I also looked for areas of mid income, between £3,000 and £4,300 per month with a relatively large number of 35-50 year olds - the kind of detailed demographics that Scout helps to search for.
Two distinct clusters and one outlier became apparent. The top left cluster were the places in London you would naturally expect, Wandsworth, Wimbeldon, Battersea in the far top left, Putney and Kensington near the edge of the blue correlation line. In the second cluster on the right were the places that may come as a surprise; East Dulwich, Boveney, Blackheath and Upminster. This second group might all become interesting locations for BTR developers to start looking at before the best locations and prime pieces of land are snapped up.
However, the big outlier was off on its own to the left, this area has the lowest time on market for flats, with them being on the market for only two weeks on average, it also has a large number of 35-50 year olds, and a relatively high level of income. So where is this panacea? Balham.
Worth noting as well that while rents for semi detached, terraced and detached properties here have increased by 19% over the past two years, rental prices for flats haven’t changed at all.
Definitely an opportunity to look at. And, judging from the number of planning applications in the area, not many companies are looking here just yet - a huge chance for someone to be the first.
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Images taken from the REalyse platform.
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