If building towers to rent was once seen as a more lucrative and progressive option than preparing them for market sale, the pendulum could just be swinging back towards the latter option.

Flexible approach: Cowen+Partners designed Bournemouth’s Oxford Gardens to be suitable for rent or sale

Joanne Cowen, chief executive of architecture practice Cowen+Partners, says the firm, based in London’s Chelsea, now sets up all its multi-family housing schemes to veer into either tenure, as external conditions dictate.

“We are always looking at design flexibility to be able to switch between rent and market sale,” she says. “This is partly in case sale prices pick up more quickly than rents, but also for a quicker return on investment to meet the higher capital outlay that is now required.”

A combination of build-cost inflation, high interest rates and post-Grenfell regulatory changes has driven up the price of developing residential towers over the past five years. Meanwhile, the cost-of-living crisis and a stagnant economy have put the brakes on once-soaring rents. The multi-family build-to-rent (BTR) sector is squeezed in the middle.

“You might aim for your net rentable area to be 80% of floorplates, but the [safety] regulations mean you have to build extra lobbies, lifts and stairs,” says Cowen. “It is more fabric for no increase in income.”

The fundamental fact remains that we do not have enough housing
Andrew Saunderson, CBRE

She adds: “Then debt is more expensive; you need it for longer because of prolongation of planning and pre-build stages; and rents are not moving – put it all together.”

Cowen+Partners is looking at flexible designs that leave potential for the reduced amenity levels and lower operational costs more suited to selling units than letting them. Cowen says she has also seen BTR towers converted after gaining planning consent into student or co-living schemes.

Another adaptation the sector is making is to look for sites slightly further out of core cities with larger footprints that work for schemes below the 18m-height threshold at which certain building safety rules kick in.

Cowen also notes that many recent schemes have fewer amenities. “There is a cost-of-living crisis and people don’t want to spend money on indulgence,” she says. “Everything has to be value-engineered. Schemes we did two years ago have to be made cheaper because of build costs.