The build-to-rent sector is booming as Generation Rent continues to grow and people stay off the property ladder for longer, with 2017 seeing more than £2bn worth of investment into the market.
It is estimated that around 20% of households across the UK now live in private rented accommodation, a figure which has soared over the past few decades as homeownership goals have changed. In London, this number rises to 30%, as average property prices far exceed average salaries, while many of the young professionals working in the city also prefer the minimal commitment and maximum flexibility of a renting lifestyle.
According to figures from Knight Frank, investment levels in the build-to-rent sector are forecast to grow by a massive 180% over the next six years, with a further 790,000 more households expected to move into this sector over the next three years. This will be further boosted by the government’s announcement that it would be investing £1m into build-to-rent developments.
One rent operator, Grainger, agreed three build-to-rent deals for £86m last year in Sheffield, Manchester and Birmingham, and these cities are some of the key areas outside London which are set to benefit from further development and investment into the renting sector.
New investments into build-to-rent
Earlier this year also saw a joint venture between leading financial asset manager ICG-Longbow and property management firm SDL Group who agreed to invest £250m towards the construction of over 2,000 new build-to-rent homes across the Midlands.
The benefits for tenants renting such accommodation include the advantages associated with living in a new-build, such as better energy efficiency and cheaper bills, as well as the style of such developments which normally come with added extras like communal areas, gyms and cinema rooms. Longer contracts are often also offered on such units, providing added security for the tenants.
Both institutional and private landlords and investors can take advantage of the growing trend as more developments pop up across the country.