The Build to Rent (BTR) real estate model is gaining popularity in the UK as an alternative to traditional home ownership and private rental options. Professionally managed, offering long-term rental contracts, and coming with a wide range of shared amenities: the sector is increasingly attractive to renters including students and prospective buyers facing affordability challenges. 

With the average property price in London at £542,000, according to Land Registry data, and mortgage rates climbing, the BTR sector is taking off with a 22 per cent year-on-year increase in 2022 of the number of BTR homes under construction across the UK, according to the British Property Federation. By 2032, about 8 per cent of UK rental homes built will be BTR (£170bn) up from 1.5 per cent today. In the US this figure stands at 12 per cent.

The BTR sector can help solve the UK’s current problem with rental affordability with data from the Leaders Romans Group (LRG) showing that the stock of homes for rent is down 38 per cent in comparison to the five-year average. Global institutional investor research indicates 70 per cent are expected to be active in the suburban Build to Rent market within the next five years, a large uptick from the 42 per cent currently active.

The Build to Rent (BTR) model is being seen as a solution to the housing crisis for students in the UK, as it addresses both the shortage and affordability of student housing. According to a report by Leaders Romans Group, there is a ratio of more than three students for every bed available in purpose-built student accommodation. With the increasing rate of admissions to higher education and the rising cost of student housing, students are facing challenges in finding suitable accommodation.

Rates of student admissions to higher education have increased by 66 per cent since 2000, whilst a lack of commensurate provisions for services have seen prices rise 61 per cent in the last decade according to the National Union of Students (NUS). BTR offers long-term rental contracts, with a wide range of shared amenities, to support residential affordability across a wide spectrum of stakeholders. 

“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.”

https://propertyindustryeye.com/build-to-rent-tipped-as-solution-to-affordability-crisis/ 

References

• https://www.theguardian.com/renting-reinvented/2023/jan/09/a-big-draw-for-renters-is-peace-of-mind-what-does-the-build-to-rent-model-offer-the-uks-property-market
• https://www.propertyreporter.co.uk/breaking-news/bluestone-cuts-rates-on-fixed-rate-residential-and-btl-products.html
• https://www.propertyreporter.co.uk/lendinvest-to-launch-homeowner-mortgages.html
• https://propertyindustryeye.com/build-to-rent-tipped-as-solution-to-affordability-crisis/ 

• https://www.wsws.org/en/articles/2023/01/13/uhrh-j13.html 
• https://www.twindig.com/market-views/london-house-prices
• https://www.lrg.co.uk/media-centre/solving-the-rent-affordability-crisis/