As the UK's lettings industry picks its way through coronavirus-induced problems, it appears the global pandemic isn't enough to discourage new entrants to the market. John Lewis has announced plans to invest in build-to-rent on a number of its existing land sites, while Czech proptech firm Flatio has made an investment into what it calls mid-term renting in the UK.
Interest in the UK's residential lettings market across different options is a much-needed boost at a time when new rules and regulations are combining with the difficulties related to the pandemic, to make it a tough industry to be in right now. Indeed, that a fresh supply of new rental homes and a different approach to letting property will be available to the UK's renters is a positive signal for the future of the industry from a tenant’s and letting agent's perspective.
Retailer to Turn Landlord
John Lewis has taken the decision to diversify its activities in an attempt to regain some of its former profits. The retailer, which had already taken a hit from the growing popularity of online shopping, has announced plans to build residential homes above or beside some 20 Waitrose supermarkets, at sites around the UK. Reports suggest planning applications for two sites in Greater London are expected to be put forward in 2021.
After employing a new economic adviser earlier in 2020, the decision to become a Build-to-Rent residential landlord is one of a number of ways John Lewis is planning to re-invent its business proposition and become more profitable. Although, once the properties are built and furnished, it possible they could be rented out via a lettings company.
The firm also plans to furnish the properties with John Lewis furniture and provide options for tenants to have food delivered from Waitrose stores, which will help to support the existing John Lewis and Waitrose brands through this new venture.
UK Rental Market Attracts Czech PropTech Firm
It’s not only British businesses who continue to recognise the opportunities in the UK’s residential rental market. Czech firm Flatio has identified the UK as one of its next investment targets as it markets its month-by-month letting platform.
The business is aiming to offer property owners and investors a third option outside of either short-term or long-term lets. It describes itself as providing mid-term and long-term renting options, but with the advantages of short-term renting. The firm is essentially marketing itself as an Airbnb alternative with a more flexible rental profile, for both landlords and tenants.
Flatio said that it has been getting a lot of interest from the UK, with a 60% increase in UK visitors to the site, as the current pandemic situation has helped support demand for mid-term flexible renting options.
“We only have 150 listings in the UK at the moment but plan to ramp this up significantly in the next three to five years as we believe the demand for affordable mid-term lets will continue to grow in the UK and globally post-pandemic,” said Radim Rezek, Flatio’s chief executive.
The expansion in the UK will be supported by the company’s recent acquisition of NomadX which has almost 2,000 listings in Portugal and a number of UK clients, something Rezek expects will help accelerate company growth from current levels.
While this suggests investors can still benefit from the UK’s rental market, it should also prove positive for tenants as they will have even more options; more landlords to choose from, more ways to rent and for a wider variety of time periods.