The build-to-rent sector has multiplied across the UK’s towns, cities and suburbs, and it could play a role in reviving a sense of community since the pandemic.
Last year, research by the British Property Federation and Savills concluded that the build-to-rent industry could see a five-fold growth surge over the next 10 years, predicting that the number of completed properties available could rise from 76,800 to more than 380,000.
This colossal projected increase is based on the rate of growth that has already taken place in this niche market in recent years, as the UK housing and construction industry has embraced the property type amid emerging trends and the changing needs of today’s tenants.
It is expected that build-to-rent – which offers purpose-built rental accommodation with numerous additional facilities and amenities for the tenant – will plug some of the gap in supply in the private rented sector, although some industry insiders acknowledge that there will still be a shortfall.
According to comments by Andy Jones, group director of corporate and build to rent at Leaders Romans Group, the traditional housing estate is now on the decline due to the rising importance of community brought on by the pandemic, with households now wanting more amenities and community spaces close by.
Build-to-rent homes create community hub
From a tenant perspective, build-to-rent can be a very different offering from traditional buy-to-let. While a standard rental property, which might be a house or a flat, tends to be self-contained and the rent simply covers your accommodation, build-to-rent offers a range of additional features.
Increasingly, this includes a communal space, with developers realising the importance of community particularly with an increase in the number of people regularly working from home. Many developments also include a shared workspace, again adding to the social aspect for tenants.
There are often communal outdoor spaces, too, and even indoor games rooms, gyms and swimming pools for tenants to use. This all creates the effect of a community ‘hub’, which Jones points out is even more important today.
“The fast-emerging BTR suburban communities provide something very different: family homes, located outside urban areas, which maintain the strong sense of community which made traditional BTR such a success – but with landscaped outdoor areas suitable for families in place of indoor games rooms and gyms.
“The values of BTR remain: high standards in service and management and a strong focus on sustainability and most importantly alongside a rich variety of services and amenities.”
The growth of the sector
While the majority of build-to-rent developments are still found in London, where such properties are particularly sought after by professional tenants who want to get the most out of their accommodation and are willing to spend more of their income to have it, the regions are catching up.
The latest data shows that there are a total of 78,717 units now complete across the UK, with 72,244 under construction and 113,379 in planning. Taking all these categories into account, there are now 91,272 units in London at any stage of construction, completion or planning, and 151,276 elsewhere.
As of the final quarter of 2022, according to the British Property Federation, the regional build-to-rent market was surging ahead of the London market. The annual percentage increase in build-to-rent homes at all stages was 9% in London, while it was 17% in the regions.
Unfortunately, build-to-rent starts and completions both declined towards the end of last year, which was down to a number of issues that affected the construction industry as a whole, including building supply shortages and staff shortages.
However, the long-term outlook remains positive across the sector, and its increase suggests a real change in what tenants are looking for from their homes, including an additional sense of community.
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