Most people living in UK rental properties rent from small private landlords. However, as the UK rental market grows, more and more people are renting from large investors who are creating new build to rent schemes.
The number of build to rent developments in the UK have risen rapidly in the past few years as a result of a greater number of consumers turning to the rental market as a more affordable alternative to buying.
Supporters of this current trend argue that it will improve the quality of choice available to consumers in the rental sector, increase the supply of housing to help stem the housing crisis, and even transform the way in which modern cities plan their growth.
According to the latest estimates by the British Property Federation, there are over 105,000 homes of this variety either completed or planned across the UK. Just over half of these homes are in London which requires a rapid growth in housing stock in order to keep pace with the capital’s growing population.
In addition, owning rental homes is a good way for pension funds and other institutional investors to get a reliable and relatively low risk income. This has meant that many major funds have announced plans to construct new Build to Rent (BTR) schemes. For example, Legal and General have announced plans to invest over £1bn in BTR around the country.
Our Director for Investment and Development Nicholas Silver noted “Build to Rent schemes are an excellent way for investors to diversify their portfolio in a rapidly growing sector of the UK property market. There are many great development opportunities both in the capital and around the country where long-term investors can add value to underutilised sites and create new homes for the rental market.”
Although most in the UK are not used to such a large rental sector, it is very common both in the US and in other European countries. For example, in Switzerland and the Netherlands investors often have close to half of their property portfolio in residential properties whereas in the UK that number is just 1%.
In addition, in countries including Germany renting is far more common with many residents preferring the flexibility which the rental market provides. The growth of larger investors getting involved in the build to rent market also means that tenants have far more security in their leases and are safe in the knowledge that they will usually be able to extend their stay in their home. This greater security means that tenants can make long term plans for their homes and careers far more easily which will prove beneficial for them and the economy as a whole.
Our Head of Residential Lettings Julia Garber commented the following: “The growth of large investors getting involved in the rental market shows how vibrant and dynamic the London rental sector is. The increase in rental properties means that potential occupiers have far more choice in where they live. Here at Robert Irving Burns, we have some of the best rental properties throughout Central London and the West End with some stunning rental properties to choose from. We look forward to even more lettings in this growing market as more and more Londoners turn to renting as an affordable way to find a new home.”
(Photo credit: https://toolstotal.com/)
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