Changes are afoot in the Private Rented Sector (PRS) and whilst a media storm has circled the Renters Reform Bill, the sector itself has, thankfully, remained buoyant. At a time when people are increasingly priced out of the housing market, private rental offers a viable alternative to homeownership.
The growth of the PRS can be directly linked to both the rising costs of property purchase and the shortage of available housing. The result is more people turning to the rental market, and therefore high demand for rented properties. In fact, the PRS is enjoying exponential growth, with supply considerably outstripping demand.
Historically, the UK has viewed renting as a ‘stepping stone’ to the ultimate goal of homeownership. However, this view is changing, and not before time. Capatalising on these shifting attitudes is the emergence of the Build To Rent industry, a (relatively) new kid in town.
What is Build To Rent?
As the name suggests, Build To Rent properties are those which have been purposefully built for private rental, rather than sold to individual homeowners. There are key differences in how BTR properties are designed, funded, and managed.
BTR properties are typically large-scale developments, which may comprise multiple properties on the same site. They deliver a high volume of units (individual homes), and designs often include communal spaces such as restaurants, play areas and even cinemas. The aim is to create community living; offering a sense of pride and belonging that is perhaps more traditionally associated with homeownership.
Where are they found?
Rather unsurprisingly, the Build to Rent market arrived first to London, where rental costs are high and so is the demand for housing. However, it caught on quickly, and BTR developments are currently making a slow march across many UK cities.
As their popularity grows, fuelled by the overall growth of the Private Rented Sector, we are starting to see these developments springing up in towns and commuter areas around the UK.
Why are they so popular?
They are a lifestyle choice. In addition to the sense of community and shared spaces, BTR developments have the advantages of scale. They are large enough to include in-house management – offering residents the reassurance of on-site security and maintenance. This may extend to external areas, where grounds and outdoor spaces are maintained for residents to enjoy.
As the world of BTR continues to evolve, developers are finding new ways to entice tenants and strike the balance of ‘belonging’ vs flexibility. For example, in some cases it is possible to transfer between properties / cities within the same tenancy period. This may be especially attractive for remote workers and for those who prioritise flexibility in work and life.
Why is this important?
The Build To Rent sector is leading the way in listening to what tenants want. For some, it is changing the view of renting from the ‘next best thing’ (after homeownership) to their preferred option This shifting viewpoint can only be a good thing for the Private Rented Sector as a whole.
With demand for property continuing to increase and the rental market enjoying rising popularity, BTR is also an attractive proposition for investors. Putting residents’ welfare front and centre isn’t just the future of design, it’s good for business too.
