Build to Rent are new build
developments designed specifically for renting. They come with longer
tenancies, a dedicated on-site manager and purpose built communal spaces, as
well as a premium price tag. Here's everything you need to know about Build-to-Rent.
Renting privately comes with a whole range of issues for many people:
complaints of damp properties which landlords refuse to repair, dealing with
extortionate rents and the precariousness of short leases. But is Built to Rent
the answer? We look at the pros and cons
What is Build to Rent?
As the name suggests, Build to Rent (sometimes known as BTR or B2R),
describes new build apartment developments that have been built specifically
for renters. Build to Rent addresses many of the problems that renters face
when renting privately such as problems associated with short-term leases.
But they are also designed to offer:
- Good quality homes, mainly in larger
towns and cities and often located near good public transport links.
- Residents will typically have access to
communal facilities like gyms.
- Developments typically have on-site
staff.
How many Build to Rent homes are there?
Build to Rent was introduced in 2012. One famous example is the London
Olympics athletes’ accommodation in Stratford, east London, that was turned
into rental accommodation. Other large developments followed and the
Build-to-Rent scheme has grown in popularity.
In 2023, according to the British Property Federation, there are 251,208
Build to Rent homes in the UK, of which 78,717 are
complete, with 72,244 new Build to Rent properties under construction
and 113,379 in planning stages.
Given that there are an estimated five million rental properties in the
UK, Build to Rent represents a small percentage, but it is growing. In fact,
John Lewis is pledged to build and rent out 10,000 homes in coming years.
How many Build to Rent London properties are
there?
There are around 96,000 London Build to Rent homes, while
outside London, there are around 155,000. Build to Rent Manchester
properties are available as well as in Birmingham, Liverpool and many other
towns and cities.
How are Build to Rent developments different?
Developers are designing their Build-to-Rent properties to suit the
lifestyles of the people they expect will want to live there. So as well as
offering good quality accommodation, they are also trying to create Build to
Rent communities within the developments by including features like communal
areas, gyms and games rooms. Some have their own concierge service.
3 Benefits of Built to Rent
Many renters have encountered issues with private renting. Common
problems include:
- Short-term leases
- Complaints that rents have unfairly
increased
- Landlords being slow to carry out
essential repairs
By comparison, the benefits of renting a new build through the Build to
Rent scheme are:
1. Tenancy options of over three years
With Build to Rent, developers should usually offer longer tenancy
agreements of 3 years or more to all new tenants who want one. These are also
known as ‘family friendly tenancies’ because they offer longer-term security
and stability for people wanting to settle down within a community.
However, there isn’t an obligation for the renter to take up a 3 year
tenancy. If they want a tenancy of 6 months, 1 year or 2 years, companies
should offer these.
Although there may be periods when the offer of longer tenancies would
interfere with planned refurbishment works. In this case, it would be
permissible to offer shorter tenancies, running up to the date of the
refurbishments.
2. Easier to address problems
The big benefit is having one landlord responsible for managing and
operating the whole development. This should make it easier for tenants to get
in touch with the landlord and get problems resolved quickly.
Another benefit is the landlord must have a complaints procedure in
place and be a member of a recognised ombudsman scheme. This means if things do
go wrong tenants should have a clear way to complain and get issues addressed.
3. The rent is clearly laid out including any
basis for increase
Where the rent or service charges are to be reviewed during the period
of the tenancy, the basis for the review and for calculating the increase
(whether as a fixed percentage or index linked to inflation) should be clearly
set out in the tenancy agreement.
So what are the disadvantages of Build to
Rent?
So, are there any disadvantages to Build to Rent? Yes. Firstly, while
more Build to Rent homes are being built, they are still only a small
proportion of private rental properties. Secondly, you may not qualify to live
in the existing Build to Rent developments. That’s because many of the ones
that are already built are targeted at specific demographics such as over 55s
or young professionals or people with pets.
Finally, and most significantly, living in a Build to Rent property
isn’t cheap….
Is Build to Rent affordable?
All the benefits of Build to Rent homes don’t come cheap. With many
offering communal workspaces, laundry services, concierge, event spaces and
gyms it isn’t surprising they can come at a premium. When you rent a new build
flat with these extra facilities and services, it means the average rent on
these developments is typically higher than comparable properties on the
private rental market.
But while you may be able to afford the rent now, bear in mind that
paying a premium for your rent is going to make it even harder to save if you
are hoping to one day buy your first home. If you are looking at rental but
one day want to afford to buy, take a look at our saving for a deposit guide. Other
government schemes (Rent to Buy and Shared Ownership
for example) may also enable you to get on the property ladder while renting.
And check out the numerous other alternatives to the government’s now defunct Help
to Buy scheme.
Do developers need to provide affordable
housing?
Yes. The Government’s guidelines say
20% is a ‘suitable benchmark’ for the level of affordable private rent homes to
be provided. Although this can be challenged by local authorities should they
wish to set a different proportion.
So what is affordable housing when it comes to Build to Rent? The
Government says national affordable housing policy requires a minimum discount
of 20% for affordable private rent homes compared to local market rents.
Am I eligible for affordable Built to Rent?
Eligibility should be agreed locally between the local authority and the
Build to Rent scheme operator, but taking into account criteria set out in
planning guidance. So contact the developer for more information on this.
Will Build to Rent make things better for
renters?
Our research suggests the benefits if you rent a new build through this
scheme could be significant. Some 40% of respondents to our recent YouGov study
said they would appreciate renting directly from a responsible company or
housing provider rather than a private landlord or lettings agent.
Over a third said renting a high-quality home would significantly
improve their rental experience.
Build to Rent developers
There are a number of Build to Rent developers, some of which include:
- Simple Life Homes
- Quintain Living
- Allsop Letting and Management
- Essential Living
- Dandara Living
- Moda Living
- Legal & General, urbanbubble
- Touchstone
- Way of Life
- Get Living
No comments:
Post a Comment