Focus on London property: how build-to-rent is changing the market

 

During the last five years, the number of build-to-rent homes that have been completed, are under construction or are in the planning process has increased by 35%.

As a multi-billion pound market, the capital’s prime build-to-rent sector is forecast to grow by 30% per annum across the next five years, according to new research released by the British Property Federation. Additionally, 55% of tenancies in London for rental properties priced over £2,500 per week are in properties owned by either professional investors or build-to-rent developers.

Across the UK, there are 148,046 build-to-rent homes that are complete, under construction or in planning. This is a spike of some 20% year-on-year, showing the build-to-rent sector continues to go from strength to strength in the UK.

Ian Fletcher, director of real estate policy at the British Property Federation, stated: “The build-to-rent sector continues to attract investment and deliver much needed homes. Not only do we have an impressive 31% growth in completions between Q3 2018 and Q3 2019, but the pipeline of new projects is also strengthening.

“Right across the country we are seeing growth in the sector, allowing people to access high quality, institutionally-managed rental properties.”

The key to choosing the right property for tenants

Homes that are built for the main purpose of being rented out puts more of a focus on shared spaces, like communal gardens, gyms and workzones. Build-to-rent can give tenants the feeling of living within a community, while having access to attractive amenities, which can be particularly pertinent in a busy city like London. And this can often lead to longer tenancies.

If you’re looking to invest in build-to-rent, it’s important to target your investments to attract tenants. City centre locations with easy access to employment, public transport and amenities are extremely attractive for buy-to-let developments, especially among young professional renters. The quality of WiFi technology is also an important aspect with working from home and flexible working becoming more common.

Demand for rental properties continues to soar

As demand continues to increase for rentals, build-to-rent properties can help increase supply across the UK. Investing in locations where tenant demand is high and demand is not being met by supply could offer stronger yields. Investors will also be less likely to experience void periods in these areas.

During uncertain times, focusing on rental yields and tenant demand can be a more lucrative strategy than buying and selling for profit. This further shows how investing in build-to-rent can offer profitable opportunities for investors, despite political and economic uncertainty.

BuyAssociation has a range of build-to-rent property investment opportunities available. Check out our investments page and sign up for more information on our investment opportunities.

Highgrove Mews

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Focus on London property: how build-to-rent is changing the market

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