INTERVIEW: Gavin Chetty – Way of Life

If build-to-rent developers carry on constructing sites at their current pace then this emerging PRS model will soon be a major player within the sector offering a ‘product’ that few private landlords can compete with.

Posh interiors, pet-friendly tenancies, concierge services, all-inclusive rent and onsite gyms and restaurants are often par for the course at build-to-rent (BTRs) sites, which are being built at a dizzying speed in most of the UK’s big cities and larger towns.

Latest data from the British Property Federation reveals there are now 242,548 build-to-rent homes in the UK, including both London and the regions, of which 78,717 are complete, 72,244 under construction and 113,379 in planning. This is small beer compared to the overall PRS of some nine million households, but it’s growing fast and the sector has the backing of many local planning authorities and the UK’s governments, who are desperate for more rented accommodation be built at both speed and scale.

BTR is an asset class that will provide stable income.”

The big question is whether this sector is an opportunity or a threat for agents.

It’s a mixed picture. Some big City institutions and funds which are directly or indirectly backing BTR are happy to outsource the building, management and letting of developments, while others want to do it in-house and agents don’t get a look in.

The Neg sat down with Gavin Chetty, who is a Brand Director at operator Way of Life, which has three developments in London offering both traditional lets but also short-stay and hotel-style accommodation, with a further three outside the Capital.

The London ones are Riverstone Heights in Bromley-by-Bow, Vida House in Deptford and The Gessner in Tottenham Hale. Two are in Birmingham and Leicester and the third is The Kell, in Kent. Way of Life is part of Long Harbour Group, a specialist property investment, development, and management firm.

“The most recent BTR buildings we launched, as well as upcoming projects, are backed by institutional investors. They are drawn to BTR because it is an attractive asset class for those seeking sustainable returns.

The fundamentals make sense, says Chetty. “Overall housing supply has fallen short
of targets and there is an increasingly undersupplied rental market. Recently, individual landlords are withdrawing from the market for various reasons because buy-to-let is becoming an unappealing proposition for them.

BTR is an asset class that will provide stable income which is correlated to inflation and has solid defensive qualities.” But London-based Way of Life does not always or often use agents to manage or let their developments, a trend which is a major threat to the estate agency sector going forward – even though agencies like Savills and KFH have substantial BTR departments.

Chetty adds: “In terms of marketing and lettings we plan, execute and manage everything in-house once an asset stabilises.

“Our digital and performance marketing capability paired with our proprietary lead management platform allows us to create a seamless buyer journey – a USP for Way of Life. It allows us to control the entire marketing and sales funnel whilst tracking attribution, gathering data, and managing leads efficiently.

We plan, execute and manage everything in-house once an asset stabilises.”

“Ultimately, it’s about generating high-quality leads and the best return on investment, and our in-house team is best placed to drive this. As Way of Life is very brand and company culture focussed, it makes sense for our team to nurture leads and manage on-site viewings, rather than agents.

Their passion for what we do comes across to both prospective renters and existing residents, which is hugely beneficial in gaining consumer confidence and trust to achieve both conversion and retention. “I think agents will always have a place in the future of BTR, but the ones that will do well are those who are flexible and willing to work closely with an operators’ existing in-house marketing, operations, and commercial teams to complement their activity.”

Does the ‘all inclusive’ rent include the big fuel price rises?

“Across our portfolio we offer a number of common denominator services and amenities which are included as part of the rent. These form part of our brand promise,” says Chetty. “Our service teams are always available to support with contracts and billing, or resolve maintenance issues. We also offer fast WiFi, work spaces, electronic parcel lockers, 24-hour security, pet-friendly apartments, residents app amongst much more.

“In addition, depending on the building and its location, we provide relevant spaces such as well-equipped gyms, state-of-the-art resident kitchens, roof gardens, and cosy sitting rooms areas that feel like an extension of your home. All of this is included in the rent.”

How do you set rents?

“Our methodology for setting rents is based on several factors,” he says.

“It takes into consideration local supply and demand dynamics, both local and citywide BTR comparables. Each buildings’ product and service play a factor.

“Interestingly, citywide BTR comparables are having more weighting in our pricing recently.

“For example, at The Gessner we can see from our data that the vast majority of renters have moved from across London, and nationally, to live there.

“Our takeaway is that if the product offer is desirable and the building is in a wellconnected location, renters are happy to relocate to a neighbourhood they wouldn’t have otherwise considered.

“Rightmove recently released data confirming that this is a market-wide trend in BTR.

“Location seems to be becoming less of a priority for renters as more attractive BTR rental stock comes onto the market. Operators will increasingly be going head to head, particularly in London.”

Is BTR just for wealthy tenants prepared to pay premium rents?

“For Way of Life, it’s about value for money, sensible pricing, and providing choice for consumers, “ says Chetty. “We are bringing something new to the market, whether that be new services, technologies, or design solutions, all of which are rooted in the validated needs and wants of modern renters.

GAVIN CHETTY – CAREER TO DATE

Gavin Chetty started his career working as a brand manager on hotel and restaurant projects for designer Martin Brudnizki of The Ivy restaurant and Soho House private members club fame. He then moved on to work for a number of hospitality groups including Mondrian Hotels, where he was Executive Marketing Director.

Chetty joined Way of Life some four years ago after being inspired by co-founder James Aumonier. “I saw it as an opportunity to apply my varied experience to an exciting company, in a relatively new sector,” he says.

“The industry as a whole piqued my interest too, as an outsider. It’s multifaceted with numerous layers to be conscious of and constantly consider: socio-economics, housing, place-making, policy, customer experience, design, innovation and ESG, to name
but a few.

“It’s a fascinating space to work in.”