Over the past ten years, the number of private renters has doubled, with 20% of people now living in rented accommodation. There is a need to meet this increasing demand, and build to rent may provide the solution.
The rise of build to rent
Build to rent are new build developments designed specifically for residential lettings rather than sale and to help meet the increasing demand in the rental sector, build to rent is expected to more than double over the next five years, with the British Property Federation predicting a staggering 200,000 build to rent sites being developed within the next two years.
What’s the attraction of build to rent?
So why are more investors, including John Lewis Partnership, moving into the build to rent developments and why are such developments attracting more tenants?
• Demand for rental properties makes build to rent developments a good investment with the potential for healthy returns.
• Potential tax incentives for developers of build to rent properties
• For those who choose not to buy or can’t afford to, more bespoke developments offer more and better quality rental options.
• Developments are maintained by a single landlord, with a clear line of responsibility, complaints procedure and reassurance that these properties will be well maintained.
• Longer tenancy options offer security for tenants.
• Rent structures are clearly set out, including a basis for increases and no upfront fees such as admin charges, attractive to tenants.
Points of caution
As with any investment, there are points of caution for a would-be investor to consider:
• Tenants don’t always want to be locked into the longer tenancy terms which property owners prefer to guarantee their income.
• It isn’t easy to find lenders for these schemes, so the initial capital may have to come from the developer’s own resources, favouring larger investors.
• This is not a way to a quick return on investment.
• The high-end spec of build to rent properties makes them more expensive to rent and may exclude many potential tenants.
• Larger tenancy blocks need a professional management system in place to ensure legal obligations are being met, the property is well maintained, and tenant safety is protected.
Meeting future expectations
Build to rent developments are setting higher standards for rental accommodation, offering more facilities such as communal areas, gyms and workspaces and providing homes in areas with good local amenities, transport links and access to work.
The type of tenants they attract are also likely to expect a high standard in building management, so having the right processes in place to ensure standards keep being met, especially when you are making this level of investment, will be critical to ensure maximum occupancy.
Building specifically for a rental market should be a win-win for property owners and tenants so long as both offer what the other wants. It will be exciting to see the impact this sector has on the evolving rental market.
No Letting Go
If you want to discuss how our local support or national network at No Letting Go could become your inventory partner, streamline your cost and reduce your workload, then contact No Letting Go today.
You might also like
Utilising No Letting Go’s property management servicesUpload on December 5, 2023 by Lydia Horsley
Utilising No Letting Go’s property management services can be pivotal in ensuring that rental properties not only meet but maintain the criteria set out by the Decent Homes Standard. Here’s why: 1. Professional Inspections and Audits No Letting Go provides professional property inspections which are essential in identifying potential health and safety hazards, ensuring that [...]READ MORE
Delving into HHSRS: The Importance of Recognising Category 1 and 2 HazardsUpload on September 22, 2023 by Nicole
Delving into HHSRS: The Importance of Recognising Category 1 and 2 Hazards The Housing Health and Safety Rating System (HHSRS) stands as a pivotal assessment tool in the UK’s housing sector. Designed to evaluate potential risks and hazards in residential properties, the HHSRS plays a crucial role in ensuring the safety and well-being of occupants. [...]READ MORE
Future-Proofing Property Management: No Letting Go’s Tech-Driven Property Inventory Software ApproachUpload on September 19, 2023 by Nicole
Future-Proofing Property Management: No Letting Go’s Tech-Driven Property Inventory Software Approach In the dynamic landscape of property management, staying ahead of the curve is not just a luxury but a necessity. As the property sector grapples with increasing demands and ever-evolving challenges, the need for innovative solutions becomes paramount. Leading the charge in this transformative [...]READ MORE
From Booking to Tracking: Streamlining Property Management with No Letting Go the Property Inventory Management SpecialistUpload on August 21, 2023 by Nicole
From Booking to Tracking: Streamlining Property Management with No Letting Go the Property Inventory Management Specialist In the ever-evolving world of property management, landlords and agents are constantly seeking ways to streamline their processes, ensuring compliance, accuracy, and efficiency. Enter No Letting Go, the UK’s leading property inventory management specialist, dedicated to creating fully-compliant property [...]READ MORE