How will the expansion of Build to Rent impact individual landlords?

How will the expansion of Build to Rent impact individual landlords?
8th November 2023

‘Build to Rent’ (B2R) refers to accommodation that is designed and built specifically for the private rental sector. The projects are typically large-scale developments, which are funded through private institutional investment and managed by specialist operators.

The aim is to provide an excellent renting experience for tenants, ensuring they have a high standard of modern accommodation and all the facilities and amenities they need. The developments can incorporate:

  • a gym
  • resident lounges
  • co-working spaces
  • rooftop terraces and/or communal gardens
  • communal areas for entertaining and socialising
  • services, such as dry cleaning and super-fast broadband
  • bike hire and storage
  • an onsite management team that provides 24/7 security and support to tenants

When the B2R business model first emerged around a decade ago, the focus was on building city-centre apartments for young working professionals, but over recent years it has started to take hold in suburban areas. These ‘BTR suburban communities’ are made up of individual family homes that are set up and managed in the same kind of way as the city centre apartments. And because the development is managed as a whole, people can easily move within the community as their needs change – e.g. to a larger house or perhaps one with more outside space.

Each community will typically have the facilities listed above, plus others, such as an EV charging point at each home and gardening, cleaning, and childcare services. The idea is that people can rent long-term without having to completely uproot themselves every time they need to upsize or downsize, and all their daily needs are taken care of on-site.

Is the expansion of B2R good or bad news for private landlords?

As a private landlord, you may be concerned about the impact this expansion of B2R could have on your own rental business – but there’s really nothing to worry about. Because of the high specification of these properties and the level of on-site support and management, the rents tend to attract a premium, meaning not all tenants will be able to afford a B2R home. So that still leaves plenty of demand for good quality rented homes that are a little less expensive.

For landlords that are offering comparable boutique and more luxury accommodation, these developments could actually help raise rents in the local area, so you may find you benefit. Meanwhile, those offering mid-range and budget rentals won’t be affected as they have a completely different target market. The reality is that there simply aren’t a big enough number of B2R developments to prove any kind of threat to private landlords and they tend to be very localised, often in and around major cities, where there is often already a significant excess of demand over supply.

What B2R – particularly the suburban communities – does, is offer those who can afford it an attractive alternative to home ownership. It also gives the rental market an extra layer and a standard to aspire towards, as well as long term rental living for those that prefer to live in high quality but flexible accommodation.

Whether you're a private landlord or you're wanting to discuss B2R developments, we can help. We have experts on both sides, so get in touch with your local branch and you'll be put in touch with the right person!

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