Build-to-rent boom has continued to drive significant new housing supply across the UK, according to the latest data published by the British Property Federation (BPF). There were 157,512 build-to-rent homes – new, high-quality, and professionally-managed homes built for renters – complete, under construction, or in planning across the UK by March-end 2020. This is a 12 percent annual jump against the same period last year. The findings revealed that between the first quarter of 2019 and the first three months of 2020, the number of completed build-to-rent (BTR) homes rose by 42 percent, the number under construction decreased by 11 percent and the number in planning jumped by 12 percent.
This phenomenal rise is because of the purpose-built, institutionally managed, professionally maintained private rental accommodation being provided by the BTR sector. It is different from traditional private rental accommodation, which usually consists of individual flats and houses planned with owner-occupiers in mind. BTR schemes bring challenges and opportunities different from those found in traditional housing, built for sale, or other real estate and infrastructure investments.
Some Benefits of BTR developments:
1. Living in new build housing developments that meet the latest important energy efficiency and safety standards is attractive to renters rather than renting a cold, damp, and potentially hazardous house
2. One out of every six renters has had their rents unfairly raised. With BTR, rent amounts are laid out clearly, including any grounds on which an increase has been made.
3. It is pertinent to mention that many tenants find it hard to ask their landlords to perform essential repairs. A BTR development is owned and managed by one landlord and a single individual or professional company presenting management onsite. This makes it more likely for residents to get a swift response to their maintenance requests, which is a significant benefit. So, should things go wrong, residents who reside there can easily complain and demand to address their problems quickly.
Some Disadvantages of BTR developments:
1. Not everyone and families in particular haven’t been well catered for by the BTR industry. Developers may broaden their horizons at some future date, planning more family units suitable for a wider variety of individuals for whom renting makes more financial sense than buying.
2. Given the nature of the investment, effective building management and maintenance are central to protecting the long-term value of development for a landlord. Maintenance costs will therefore be higher than for other tenures of property. Managing this operating expense budget is therefore key to the viability of any BTR project.
3. Renting a newly built BTR property is certainly not cheap. Particularly in London, where local rent amounts are famously high, living in a BTR apartment can come at a cost.
Although BTR offers many benefits, it can come across as an expensive option. The reason is that the management and facilities in the developments come at a price.
That all adds to rental costs being much higher than the local average, particularly in London, where prices are over 8% higher than those charged for other similar homes. Nonetheless, the critical thing to remember here is that Build to Rent offers relative value for money. Residents profit from communal lounges, amenities, and workspaces where they can meet other members of their community with whom they share similar values.