Build To Rent – Everything You Need To Know

Build to Rent (BTR) is becoming increasingly popular amongst property developers but for many, the term remains relatively unknown. In this article, we explore everything you need to know about Build to Rent plus best practices for investors and renters.

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So, What is Build to Rent?

What is build to rent? The term Build to rent refers to purpose build homes that are designed and constructed specifically for the private rental market rather than for sale. Build to rent properties are usually contemporary managed apartments with on-site facilities such as gyms, communal areas, shared working spaces and cafes. Because of this, tenants can expect to pay a premium for these types of properties over other properties in similar locations.

For renters, BTR properties offer high-spec accommodation and stylish living with a community feel while for investors, BTR can offer high rental yields without the burden of managing the property.

Pros of Build to Rent

As well as offering stylish living for tenants, BTR properties also usually offer flexible renting terms for tenants in comparison to other rental property meaning you have more flexibility when it comes to adapting your lease to suit your requirements.
The Government encourages the sector’s growth as it helps meet the rising demand of affordable rental properties across the UK. For this reason, it’s a requirement for 20% of each housing development to be affordable housing.
Unlike traditional rented properties, BTR properties benefit from on-site maintenance meaning no long waits when it comes to property repairs and maintenance.

Cons of Build to Rent

According to Financial Times, tenants of BTR properties typically pay an 11% premium over other properties in similar locations – a potential turn-off for many renters amidst the cost of living crisis.
As they are built to provide private rental accommodation, they are not allowed to be sold. For investors who may wish to keep their options open amidst market volatility, BTR may be the best option.
It’s estimated that by 2032, build to rent properties will account for only 8% of the rental market meaning there’ll likely be very few of them around in the near future, even as demand grows.

Is it worth investing in Build to Rent properties?

No doubt BTR properties can be lucrative investment opportunities. With higher rental yields in comparison to standard buy-to-let properties, lower vacancy rates, a continuous increase in rental growth and an ongoing demand for rental property, investing in BTR properties is a no-brainer. As always doing your due diligence is key.

Before you go …

We hope this article has helped you gain more insight when it comes to Buy to Rent Property.

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