The rise of smart technology isn’t just a blessing for ordinary folk – it can offer many benefits to private landlords, too. If you’re late to the party, follow our blog so you don’t miss out.
By sharing such news items and personal opinions, you will see that our role in understanding your business is broader than specifying, designing, fitting, inspecting and maintaining your electrical installations.
Today we’re looking at the pros and cons of Smart Home Technology in the rental market. Can ‘smart technology’ help landlords save cash, attract tenants, do their bit for the environment, and help you comply with stiffening EPC responsibilities.
We are currently living in a world of smartphones, smart cars, smart televisions and now, smart homes. Even though the smart home market is still in the early adopter stage, people are actually accepting and installing this technology more rapidly than originally imagined.
It has generally been the view that we in the UK are about 10 years behind the USA when it comes to technology advances.
The following makes interesting reading, based on a study conducted recently in the States to measure the rental market’s reaction to smart homes and rent.
Millennials are now the largest living generation, surpassing baby boomers for the first time. They’ve grown up with constant access to, and integration with, information technology. According to a study from Wakefield Research, 86% of Millennials would pay more for a rental unit with smart technology. Up to 20% more is suggested. 44% would even sacrifice a parking spot for smart features in their apartment.
But, is it the same attitude to paying higher rent for smart technology in the British market?
We’ll find out shortly.
Firstly, why should landlords even consider building Smart Home devices into their BTL properties?
Smart home technology may be something that UK landlords should approach more carefully. Although it can be a worthwhile investment and make the property more desirable, its usage may depend on your tenants – something that’s breakable may need to be repaired, which tends to remove the benefit.
Smart thermostats are one technology many landlords do opt to install. They are popular among tenants allowing them to save money on bills.
This should also be part of the landlord’s EPC compliance strategy.
The better known of these are Hive and Google Nest, which offer an app to control the heating when you’re not at home, avoiding the need to rely on timers or leave the heating on when you don’t need it.
Other smart home technology options include smart lightbulbs which can be operated remotely, smart doorbells and security cameras.
There is evidence that including smart doorbells and security cameras can reduce your insurance premiums. Whether this is something worth investing in for your tenants needs weighing up. Anything that makes your property more appealing to ‘Generation Rent’ than the one next door is likely to be a bonus though.
76% of tenants unlikely to pay more for smart rental home – study, the British market
While many industry experts are predicting what the home of the future could look like, research from Ascend Properties has found that UK residents aren’t swayed by smart homes.
The Build to Rent (BTR) sector is often seen as the future of renting, presenting better homes with all the mod-cons expected from today’s residents, including great broadband, on-site amenities and communal outdoor areas.
We mentioned previously that John Lewis to move into the residential property market by building 10,000 BTR homes over the next few years. The department store chain said it wanted to address the ‘national housing shortage’ and support local communities.
However, BTR specialists found that residents are less worried when it comes to smart tech integration, with just a third stating they would be more likely to rent a home purely because it had smart tech.
Furthermore, the vast majority (74%) also stated they would be unlikely to pay more for a rental property, simply because it was smart tech-enabled; with just 2% willing to pay much more than the market rate.
The ability to save money through smart tech features such as utility management and smart meters, was what held the greatest appeal amongst potential tenants. Safety also ranked high, with features such as smart locks and surveillance holding high appeal as well.
So, never say never!
It is interesting to see what Ged McPartlin, managing director of Ascend Properties, had to say about these findings:
“It’s fair to say that while smart tech is a great addition to the home, residents aren’t quite ready to pay above the odds for the privilege of a fully automated home of the future.”
“In fact, it’s important to get the basics right and provide the fundamentals such as good WiFi, or a well-maintained outdoor space, before you start to add the additional bells and whistles.”
He adds: “But that’s not to say there isn’t a market for some degree of smart technology and, with any investment, it’s about choosing the right additions to compliment the property itself, as well as the wider lifestyle offering you are trying to deliver.”
You see – we said ‘never say never’.
We think it really is a question of watch this space.
On new build, we’re already finding that it’s as easy to include smart tech into the infrastructure as not. One way forward is to prepare the property for future technology adaption – a sort of ‘plug in and go’ approach.
New build will be spec’d to meet future EPC targets, through insulation, glazing and air flow management. It is the landlords of older properties that have to sit up and take note. Remote heat management can save up to 10 – 15% on energy bills.
Smart Rental. It is coming. How ready are you to get ready?