This update is by economist Chris Worthington, who is a regular PIM speaker.
Build To Rent – BtR
This month the main subject is the growth of the build to rent (BtR) market. BtR developments are typically medium to large sized developments of apartments, funded by institutional investors and more specialised property development funds.
The UK has been relatively late in coming the BTR party, the model is better established in the USA, Canada and in some European countries especially Germany.
BtR developments in the UK are typically high specification apartments with a range of onsite facilities and a relatively high rents.
Rents normally include utility bills, fast broadband and a 24 hour concierge service. There are usually communal lounge areas and a fitness room. Some build to rent development include roof gardens, health centres and parks.
The government National Planning Policy Framework (NPPF) includes specific policy references to BtR, a recognition from Government of the important role played by BtR in delivering future housing growth.
If a need for BtR is identified through a local needs assessment, local planning authorities have been directed to “include a plan policy setting out their approach to promoting and accommodating BtR.
This should recognise the circumstances and locations where build to rent will be encouraged, for example as part of a development on a large site or in a town centre regeneration area.”
BtR Growth in the UK
Build to rent first took off in the UK in London, but BtR developments are growing rapidly in several cities in the UK, including Manchester and Salford where 7% of the housing stock is made up of BtR.
It is also becoming well established in Birmingham, Leeds, Cardiff, Newcastle, Glasgow, Norwich and Chelmsford and as previously reported in the market overview, Bristol.
The government policy towards BtR as set out the NPPF, clearly acknowledges that the sector will be encouraged and will continue to grow. BtR is geared towards the lifestyle of affluent young professionals and may also suit less well paid couples who are “key workers” in the public sector.
Opportunities for Property Investors
The growth of BtR is a significant change in the market – how should private buy to let investors respond?
City centres have been some of the most attractive places to invest in recent years and despite the growth of BtR there will be opportunities available in city centres for private investors, albeit on a reduced scale.
Landlords also need to compete on amenities – attractive décor, a well maintained garden and the inclusion of an internet connection in the rent will all help to attract good tenants.
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK at our next PIM on Thursday 30 May 2019 at Future Inn, Bristol, BS1 3EN.
We hope you will join us then.
For more info and to reserve your place Click Below