UK Apartment Association chiefs discuss BTR potential

Operators, suppliers and developers in the growing build-to-rent (BTR) sector gathered at the UK Apartment Association’s (UKAA’s) annual BTR Expo in London on 20 April, where Property Week sat down with UKAA chief executive Brendan Geraghty and Gillian McLees, chair of UKAA Scotland and director of BTR at Scottish estate agency Rettie & Co.

While Geraghty admits insights from discussions at the event were not “dramatic”, he says they helped attendees “join the dots more coherently so a more tangible and constructive conversation can take place”.

Economic environment

Geraghty adds that although the current economic situation is “tricky”, the “viability of BTR is challenging even in good conditions”.

He says: “Everything’s changing – the cost of living is moving, construction costs are starting to stabilise, inflation looks like it’s going up. There’s an awful lot of moving parts. It’s challenging, and I suspect it will remain challenging for a little while yet.”

However, he adds: “The fundamentals on BTR are 100% sound and haven’t changed at all. There are headwinds at the moment, and there are always going to be difficult patches. But everybody’s confident that the industry will succeed. We had £1.1bn invested in Q1 alone.”

One of the biggest hurdles, according to McLees, is the rent control measures put in place in Scotland. Earlier in the week, Rettie & Co published a report on behalf of the Scottish Property Federation that revealed the majority of investors found the Scottish BTR market “unattractive”, with some finding it completely “uninvestable”.

McLees says the government needs to do more to attract investors back to the Scottish BTR market, but that “feels like pushing water up a hill right now”.

She adds: “We’re trying to find solutions to make sure we can explain what’s happening in Scotland, giving the investors some certainty and making us less of a risky option.

“There are already a number of uncertainties in Scotland, such as the independence debate. Scotland is already higher up the risk matrix from that point of view, but the opportunities were large enough to combat that.”

She adds that the government’s decision to add the rent cap without consultation resulted in a “consequence where the money is leaving Scotland and going elsewhere”.

Delivery potential

Geraghty says that throughout the UK, there is still massive potential for growth in the sector, claiming there is capacity to deliver up to two million homes in the UK.

“We’re sitting at about 80,000 homes, but we have the potential to deliver two million,” he says. “We have more money than you can shake a stick at [from people] who are interested in doing that.”

Geraghty also points out that BTR is not fulfilling its potential to be recognised for its social value, particularly when it comes to the age-old chestnut of trying to secure planning.

He says planning is by far the biggest obstacle to achieving the two-million-homes figure.

“We need to turn our attention to really develop, nurture and articulate the social value to ourselves, the industry, government, society at large through local authorities and, ultimately, through to the customer.

“BTR needs to be recognised for what it is, which is not the same for the PRS [private rented sector] or for-sale.”


Throughout the discussion and the BTR Expo, the most consistent area of debate was environmental, social and governance (ESG). With the industry gearing up to meet the government’s sustainability and net zero targets, McLees argues that “we don’t necessarily have to push it”.

She adds: “I’m not finding it [ESG] a difficult sale. Most of our big corporate and institutional funded landlords want it, and our customers expect it. We just need to build the ESG agenda into our models early and deliver it.”

Geraghty agrees that investors are looking at the BTR market with “an ESG mindset”, claiming that institutional investors are more aware of the “reputational damage” of not doing so.

“Reputational damage is a big deal in their approach. Because of the influence of that type of legacy thinking on the BTR process, it’s clear, and we can see it coming in; it’s only going to get stronger.”