The burgeoning Build to Rent sector can help solve the UK’s current problem with rental affordability, according to Leaders Romans Group (LRG).
Recent research by Zoopla showed rental unaffordability is at its highest level for over a decade and now equates to 35% of the average income of a single earner. London has seen the highest rent rises in the country (17% up on 2021), after Manchester (15.6%), Birmingham (12.3%), Bristol (12.9%) and Sheffield (12.4%).
According to Andy Jones, group director corporate & BTR at LRG, supply and demand is at the root of the problem, with the stock of homes for rent down 38% in comparison to the five-year average.
He commented: “The solution to meeting demand is increased investment in quality rental stock. Fortunately the signs are positive. Research among global institutional investors has found that 70% anticipate being active in the suburban Build to Rent market within the next five years: a substantial increase from the 42% currently active.
“Furthermore, recent analysis by the British Property Federation states that the sector is set to be worth £170bn by 2032 due to BTR units in the UK rising from 76,800 to over 380,000.”
Jones also believes the problem will be helped by more rental properties being provided outside cities such as London, Manchester and Birmingham.
“Suburban BTR is key to meeting growing demand,” he said. “In contrast to traditional BTR, this new iteration focuses on the areas of rapidly growing demand: family homes in suburban locations. BTR suburban communities also offer levels of service and flexibility above that available through home ownership and frequently property maintenance, wide ranging amenities and the flexibility for a tenant to move with ease from one unit to another as their requirements change.”
However, while solutions to the crisis exist in the form of new opportunities and investor interest, Jones believes that government support is lacking.
He commented: “The government, in its white paper A Fairer Rented Private Sector, committed to raising standards in the private rented sector. And so it is disappointing that the long-promised Renters Reform Bill is delayed; also that new planning guidance published for consultation in December failed to make any mention of BTR. Government support is the missing piece of the jigsaw and once in place, could ease the growing difficulties.”
Comments (1)
Who really runs the country? When Liz Truss came up with proposals that upset “the Markets” she was out, so it looks like the Government is a puppet of big business and being part of Government is merely a way for ministers to get into big business and make real money when they quit politics. According to the influential paper (which I recommend reading) “The Evolving Private Rented Sector: Its Contribution and Potential” produced by Rugg and Davies at the University of York Centre for Housing Policy. ” For well over a decade a stated goal for the PRS by successive English governments has been to encourage large- scale institutional investment in new properties built specifically for the rental market” It seems that the big business are realising that providing homes could be a good earner. So are these people exerting control over the Government to squeeze the little Landlords who make up most of the PRS out, as they are standing in the way of their plans to take over? The same paper goes onto say “” BTR often aims to create a ‘new style’ of rental offer, focussing on longer tenancies with a defined process for rent review, transparent access fees, and a level of on-site amenity depending on the scale of the development. Utilities – including broadband – are often included in the rent. There is an intention for developments to look towards community creation, and there is generally an aspirational element to the market” So BTL primarily seeks top notch upwardly mobile tenants no room for poorer people. The paper mentions “Other ‘sub-categories’ of BTR are based on higher densities. ‘Co-living’ offer space more suited to – generally – younger single people, with small furnished en suite rooms very similar to budget chain hotel rooms but with communal spaces including shared kitchens, entertainment areas such as cinemas and gyms, and cafes and bars.” Take away the cinemas, gyms cafes and bars and what are you left with? Institutional HMO’s. Who knows what the future will be? We could speculate that in years to come owning property will be for the elite in gated communities with security while the rest of us with some income are living in various tiers of rented property according to our means as beholden wage slaves to the institutions that own our homes and run our lives. Maybe we will be the full 1984 but a hundred years later than predicted. Then again maybe we will be living in a technological, medical and economic utopia but that is taking us from the realms of speculation into the realms of fantasy I fear.