Is build to rent the future?

60,000 purpose built rental units are now in the pipeline in the UK, as more investors begin to identify the future growth potential of the sector.

Tenants and the government alike are demanding reform in the rental market, with the traditional buy-to-let model looking increasingly out of date. And now more than 60,000 build-to-rent units, purpose-built rental accommodation, is in the pipeline, according to new figures from the British Property Federation.

Growing appetite from institutional investors for the sector is driving the number of schemes set for delivery. Knight Frank estimates that the UK’s build-to-rent sector will be worth £50 billion by 2020.

Homeownership levels in Britain are falling while, reversely, the country’s private rented sector has now reached a record size and is still growing. The demand for rental accommodation has increased by 17,500 each month for the past decade.

While the cost of ownership is preventing many from owning a home, it’s Britain’s young workforce that’s initiating the rental sectors evolution towards build-to-rent. 60% of 20 to 39-year-olds will be renting in the UK by 2025, and a large majority harbour no ambitions to own property, instead preferring the flexibility that long-term property provides.

Build-to-rent is the answer to buy-to-let; purpose-built accommodation for the long-term tenant. It’s also the change the government wants to see in order to ensure greater regulation in the rental market.

With long-term tenants likely to stay in one place for longer periods, one of the architects behind two large build-to-rent schemes in London believes providing large communal areas and building a sense of community is key to ensuring people stay.

Jordan Perlman, Co-Founder of Newground Architects, commented: “Having areas where people can socialise, make friends and feel like they live in a genuine community is essential if they are to stay over the long run.”


Inheritance Tax Guide How to Save £1000s
How to avoid New Buy-to-let tax
Save £1000s on your mortgage
Save over £500 on Gas and Electric
Free Unlimited Broadband

Written by: Houseladder