Build to rent, will this become the norm?

The build to rent industry is booming and will continue to grow, so we look at how BTR works and what are the benefits for investors and tenants.

  • What is built to rent?

  • Why is it so attractive to investors?

  • Why is it so popular?

What is built to rent?

Build-to-rent apartment

Why is it so attractive to investors?

The attractiveness comes from the opportunity for long-term income. Building to rent allows an investor to make money year on year compared to a build to sell scheme, and with no shortage of renters, there is potential for a high rent roll and an endless demographic of customers.

 Though there are some downsides to a BTR scheme and this comes down supply and demand, which means that for growth in BTR brings more competition. However, thanks to the demand for quality affordable housing, prices will rise and this has happened mainly in London where a study found that London’s new private rent communities were, on average, 11% more expensive than rental properties nearby, with a one-bedroom flat costing £1,841 a month , this could eventually mean a long-term dip where renting will become unaffordable to an average person reducing the demand.

The Waterfront, Knott- end-on-Sea

Why is it so popular?

With a lot of things in 21st-century living, people want reliability and ease of use. The amenities of a BTR are also popular with potential renters, with some investors offering luxury services like free gyms and tenant only discounts for bars and restaurants, while also offering the potential for all-inclusive bills including utility and council tax.

Build to rent schemes can be an answer for the lack of good quality housing, however it could be the cause of its own demise, with its exceeding growth leading to its downfall, investors in BTR must be careful to not oversaturate a certain area of land to otherwise bring prices too high which could lead to a crash.

 

 

If you are interested in letting a property, make sure to check out our residential portfolio.

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