Build to Rent: What is it?
In the UK, renting is more popular than ever. Young professionals desire more flexibility in their housing arrangements since housing costs are rising.
In the UK, renting is more popular than ever. Young professionals desire more flexibility in their housing arrangements since housing costs are rising.
What is build to rent?
The phrase "build to rent" (often abbreviated as "BtR") refers to newly constructed real estate projects that are made only for the rental market. The manner the residences and auxiliary buildings are planned and constructed is influenced by the fact that every residence in the development is only available for rent, not purchase.
What distinguishes Build to Rent developments?
Naturally, developers are building BTR sites to fit potential renters' lifestyles in order to appeal to a certain segment of the real estate market (i.e., those who want to rent rather than buy).
If you're willing and able to pay the rent they demand, many BTR developments go above and beyond simply creating magnificent apartments. Of course, the homes themselves must match modern standards of living, and many do so better than expected.
By integrating features like public areas where residents can hang out and socialize together, developers are now building, or at least attempting to create, small communities within their developments.
Benefits of build to rent
The construct to rent experience's key advantage is that it caters to the vast, diverse, and expanding UK rental market. That requires starting with a guaranteed hassle-free rental experience. Moving in will be a breeze with the support of clear contracts, a competent concierge team, and several optional extras.
Buildings designed for rental also make it simple to settle in and stay there. Due to increased BtR competition, high-quality design, furnishings, fixtures, and fittings have become the basic need.
Drawbacks of build to rent
The primary disadvantage of building for rent is that you clearly cannot purchase a property! Even if you fall in love with the house and the surrounding area, you'll always be renting there. But at least you won't be caught off guard because you'll be going into the process prepared.
The fact that properties designed for leasing often have higher monthly rental fees is another disadvantage. Although costs vary by region, it's not uncommon for BtR pricing to be about 11% higher than the average for the local market. However, the quality of the constructed surroundings, the on-site amenities, and the quality-of-life extras available often reflect this greater price.
Are there any options for affordable housing in build-to-rent developments?
While there are certain exceptions, 20% of all new build-to-rent buildings should have rental units with reasonable private rent. This particular affordable housing choice was created for build-to-rent programmes.
Where can I locate UK new construction rental-only developments?
The majority of new construction for rent in the UK is found in larger towns and major cities. This is so that we may target their considerably larger rental markets. BtR construction hotspots include London, Manchester, and Birmingham, but new developments are springing up all around the UK.
Do developers have to offer affordable housing?
All BTR developments should dedicate 20% of the land to affordable housing, though local authorities are free to challenge this if they choose to set a different percentage. However, the guidance stipulates that they must use their local plan to justify any decrease in the number of affordable homes, so they won't be allowed to do this at will.
However, the term "affordable housing" isn't quite objective. Referring once more to government instructions on the subject, affordable private rent is defined as a "20% discount on the private market rent," which is probably a figure that the developers decide to set.
Future purchases and sales of houses built to rent are possible?
Currently, there is some ambiguity in this area because Build to Rent homes are still relatively new and the minimum time frame, which is a constraint to this under a Section 106 legal agreement and is often expected to last 15 years, has not yet passed.
Only time will tell if there will be a mass sale of these properties in the future. It's unlikely, but not completely impossible, assuming they continue to generate steady rental income for the investors that fund the developments.
Is build to rent anything to think about?
Build-to-rent complexes are unquestionably worthwhile to take into consideration if you're seeking for a cozy, reachable, and practical rental property. Key rental markets are seeing new construction each month, increasing both the variety and the level of competition. If you are in a large city or town, chances are good that some good BtR solutions will soon be available, if not already.