With new tax rules and political change, 2016 has been a rather rough year for the buy-to-let sector. But is it time to give up on buy-to-let and move on to build-to-rent?
The buy-to-let sector has been around for a while now, and with most things that have a long life span, they eventually need to make a choice between a path of stagnation or on of reinvention.
If one asked Britain’s tenants and the country’s Government, their answer would be quite clear. Let’s reinvent and call it build-to-rent.
But why do two out of three parts of the property market feel this way?
Firstly, the Government thinks that build-to-rent, which could also be described as structured, high-quality living specifically aimed at the generation most in need of it, may be the best way to get close to a fix of the ever-growing housing shortage.
Secondly, the way tenants are looking at rental accommodation has changed. Whilst renting used to be a last resort, it’s now becoming a first choice for many renters. The Private Rented Sector give the younger generation the freedom to move around whilst living in a place surrounded by their peers in a beautiful place which in a best case scenario has all shops and maybe even a gym in the building.
Data recently published by Connells Survey and Valuation revealed that, in the last year, buy-to-let activity has gone down by 13.3%.
This comes at a time when the Government is trying to clamp down on property investors whilst the number of renters is constantly growing. For some, this might be one of the biggest paradoxes 2016 has to offer, and there is an abundance to choose from.
Whilst some might still hold out hope to make it onto the property ladder, others, mainly those dubbed Generation Y, choose to rent because it works better for their lifestyle.
Buy-to-let was created to serve that older generation, to serve those whose main aim it was to live in a property they can call their own. Build-to-rent on the other hand serves the younger generation. It’s built for those valuing a trip to Asia over owning a car or a pay raise over living down the road from Mum and Dad’s.
Build-to-rent is aimed at Generation Adventure. And we’re nowhere near peak yet, when it comes to experiencing a global life to its fullest.