Build to Rent (BTR), a property sector that has gained tremendous popularity in recent years, is proving to be a game-changer in the UK real estate market. This sector is quickly redefining traditional property investment models and attracting substantial attention from institutional investors, landlords, and developers.
What is Build to Rent?
BTR, as the name suggests, involves the creation of new-build residential units specifically for the rental market, rather than for individual sale. These developments are typically managed by a single institutional entity or estate agent, providing tenants with a host of integrated services and facilities. Such a system not only ensures higher-quality management but also fosters a sense of community among the residents.
The Data Tells the Story
According to the British Property Federation, there were 157,512 completed BTR homes in the UK as of Q4 2020, with another 86,787 under construction and 80,730 in the planning stages. The market has shown steady growth, suggesting a thriving sector that offers great potential for investors.
In fact, the NHBC’s recent launch of a dedicated BTR insights collection underscores the significance of this sector in the broader UK housing market. This resource aims to provide comprehensive data and insights to assist investors and developers in making informed decisions.
Why Build to Rent?
1. Consistent Returns
BTR offers landlords the potential for consistent, inflation-linked returns. The regular income stream generated by rental properties can act as a buffer against economic volatility and offer attractive risk-adjusted returns.
2. Demand for Quality Rental Accommodation
As home ownership becomes increasingly unaffordable, especially for younger generations, the demand for quality rental accommodation continues to rise. BTR properties, with their focus on quality and tenant satisfaction, are ideally positioned to cater to this need.
3. Professional Management
The management of BTR developments by professional entities offers several advantages over the traditional buy-to-let model. This includes everything from streamlined tenant management to efficient property maintenance, which can result in higher tenant retention rates and lower vacancy risks.
4. Government Support
The UK Government has been actively encouraging BTR developments, offering planning incentives and financial support. This positive regulatory environment adds to the appeal of investing in the BTR sector.
The surge in popularity of BTR investments represents a paradigm shift in the UK property market. By aligning the interests of landlords, tenants, and investors, it creates a win-win situation that bodes well for the future of housing in the country. The continuing growth of this sector, driven by robust demand and supported by a favourable regulatory environment, makes BTR a compelling investment opportunity for landlords looking to diversify their portfolios.
If you’re a landlord interested in exploring the BTR sector, we invite you to get in touch with our expert team. We can guide you through the nuances of this exciting investment opportunity, helping you make informed decisions that align with your financial goals.
