Build-to-rent schemes on the up as demand for quality rental accommodation soars
The demand for high-quality rental accommodation has soared over the last year as the development of purpose-built rental developments gathers pace across the UK to keep up with demand.
With adults renting for longer, the want for quality schemes has increased and property developers are scrambling to meet the demand, backed by investments from large institutional investors, pensions and insurance funds including the likes of M&G and Legal & General.
In fact, the number of purpose-built rental homes completed, under construction or under planning consideration increased by 30% in the last 12 months alone.
Figures from the British Property Federation and Savills highlight just under 118,000 build-to-rent properties across all stages of development in Q1 2018, up 45% on the same period the year before.
Director of real estate policy at the British Property Federation, Ian Fletcher, said that: “There are exemplar local authorities across the UK leading the charge, giving build-to-rent a chance to expand in the regions and demonstrate that it can cater for a wider range of people.”
The changing face of the rental market
The rental market has changed drastically over the last decade. Once the domain of smaller individual landlords with small, personal property portfolios, as more older adults remain in the rental market, the demand of quality and on-site amenities has grown. In fact, some 1.1m adults in the UK between the ages of 35 and 44 rent.
The so-called ‘generation rent’ is now looking for a more luxurious and long-term rental solution and see purpose-built developments as the ideal place to lay down semi-permanent roots and call home, typically whilst saving towards a deposit, especially in urban centres such as Manchester, Liverpool and Leeds.
And property investors have switched focus to meet these demands. Whereas 10 years ago student accommodation was the new and lucrative market, investors are now attracted by the steady income and large-scale rented apartment blocks on offer.
Read more: Demand for rental property outstrips supply
In the branding of new developments, the real emphasis is placed on the community that schemes will hold, with other plus points such as on-site gyms, 24-hour concierges and even rooftop running tracks adding to the environment.
And with £50bn expected to be invested in the built-to-rent market before the end of the decade, this looks a trend that’s set to continue.