With 10,000 BTR homes already in London and a further 9,500 under construction, it is no surprise that the rental market is decidedly focused on communal living. As such, property developers need to play the long game: no longer solely construction managers, but now also long-term landlords and lifestyle gurus. But how does the industry make the shift required to tap into the communal living trend?
The demand for private rental accommodation continues to rise. An increase in house prices has seen ‘Generation Rent’, as they have been coined, forced into renting property, rather than saving for a mortgage. The trend of renting instead of buying is perhaps more prevalent in larger cities, such as London, Birmingham and Manchester, where prices for bricks and mortar fetch a premium.
By 2021, there will be nearly 5.79m households renting, which is a one in four ratio. The numbers go to show the demand for private rental accommodation – something that property developers will need to factor in when building new homes.
Once upon a time, developers would build new homes with the aim of selling them privately. Lately, however, there has been a shift in their approach. Build-To-Rent projectshave become increasingly popular with property developers, as they construct, manage and maintain the buildings themselves. https://realyse.com/blog/post/the-golden-opportunity-in-build-to-rent-demand
Making the Correct Decisions
Building a new property with the sole aim of renting it brings a new set of challenges. When developers construct apartment blocks and sell them off, their primary aim is to create good-quality living spaces that people want to buy. Once those properties are sold, the job of the developer is essentially complete.
With BTR developments, the dynamics differ slightly. Of course, high quality apartments are integral, but there are more aspects to the development that require consideration. The developers effectively become landlords, and as such need to keep an entire building of tenants happy on an ongoing basis.