What’s in a name? New insights on the creation of the Private Rented Communities asset class

We have had very good and interesting feedback on our recent Building Private Rented Communities (PRC) paper from February 2014. One of the more frequent questions I have been asked is on the rationale behind the new PRC terminology that we are actively encouraging in the market to replace Build-to- Rent.

First and foremost, PRCs better reflect the fundamental ethos of this new purpose-built, professionally managed asset class. The former Build-to-Rent phrasing is a clear industry name that has highlighted, perhaps rightly at one point, the need to physically create these properties. However, as the sector is moving from theory to reality, so too should the terminology evolve to better reflect the legacy asset class that these buildings will come to represent. This isn’t about construction; it’s about living. The new relationship between tenants and landlords will underpin this community, which is relatively novel in the UK but commonplace in many locations around the world, notably in North America and Northern Europe.

Secondly, Build-to-Rent is a play on Buy-to-Let and as a result is encumbered by a whole host of the wrong kinds of perceptions. We need to move away from the old way of delivering and managing rental product as PRCs represent so much more, both in terms of the physical structures and the management platform.

Finally, this new product is fundamentally about putting the tenant first, as can be seen by the likes of Get Living London, Fizzy Living, be:here and Essential Living. All use an entirely different lexicon of language that means something to their customers. For this approach to be genuine, it needs to have a name that recognises building rental homes as more than just a structure, but a living breathing community.

Understanding the needs of residents is something that the development industry has all too often left as an afterthought. But owning and managing beyond the transaction is about building a community. Soft though this sounds to hard-bitten developers, the evidence is clear that Building Private Rented Communities reduces voids, prolongs tenancies and as a result makes good business sense.

We need to continually evolve to meet the challenge of a customer-centric approach – and we need the brand to prove we’re serious about it.