If you see a bandwagon, it's too late

Property investors funnelled an additional 80% of capital into the build-to-rent market in 2021 compared to the previous year, and this is set to increase as more people see value in the industry.

As the UK’s private rented sector struggles to meet the clamouring demand, the build-to-rent sector is rising up to plug the gap and provide additional homes for thousands of people.

The latest Zoopla figures show that demand for rental homes in the UK is around 43% above the five-year average at the moment. Private rental values are also at a 13-year high, as the number of properties available continues to fall short of the needs of renters.

An additional factor to this, though, is that standards in the private rented sector are continually improving on the whole, as the industry cracks down on rogue landlords, while more investors also see the value of offering more to tenants.

Where does build-to-rent come in?

The build-to-rent sector involves the provision of privately rented, purpose-built homes that are often of a higher specification than many standard buy-to-lets.

They tend to be located in high demand areas, such as in city centres or other built-up areas, and offer additional amenities such as social spaces and communal gardens. Some will also have extras like gyms, concierges and other services available.

Although build-to-rent homes can sometimes be more expensive for the tenant, the additional services they offer can in fact make them good value for money for those who live there.

A stopgap for some, long-term option for others

According to the British Property Federation (BPF), many build-to-rent schemes offer longer term tenancies and predictable rents. They are therefore hugely appealing to long-term renters, many of which enjoy the flexibility renting offers but want the security of a home for a long period of time.

For others, the build-to-rent sector opens up additional options for those who will look to buy in the future.

Thinking of investing in build-to-rent?

While the sector attracts a lot of institutional investment, individuals can also invest. This is particularly the case as the sector grows.

The latest figures from the BPF show that there are now 205,525 build-to-rent homes across the UK, including 63,950 completed homes, 42,032 under construction and 99,543 in planning. In terms of regional spread, there are now 88,893 in London and 116,632 elsewhere in the country.

On investing in the space, Sturgeon Ventures Portfolio Manager & Investment Committee Member, Tim Peppiatt, comments: “Once the exclusive domain for institutions, technology is democratising investment into high grade property investment”.” Furthermore, the anaemic returns from existing avenues like REIT’s and traditional property funds, are driving investors towards the more active fund manager like Sturgeon”. “www.maketorent.com facilitates access to property development, ownership and rental income on a fractional basis, with the investor tracking performance through a secure private portal”

'If you see a bandwagon, it's too late' Sir James Goldsmith. French-British Businessman and Politician

Previous | Next | View all