Should I Invest in BTR?

By 11th October 2017News
image of the kampus in manchester

The private rented sector (PRS) and the emerging build to rent sector (BTR) are flourishing in the UK as Generation Rent continues to grow. With the government lagging behind in providing suitable and affordable accommodation, and stagnant wages preventing young people from getting on the housing ladder, private investors are creating modern housing for a growing number of tenants.

As home ownership continues to fall, a Knight Frank report predicts that one in four households will be privately renting by 2021, and increasingly renting from large scale corporate landlords and property companies. The thriving build to rent sector is worth £25bn in 2017, yet the report says this will expand to a whopping £70bn in four years’ time.

row of houses above a shop on busy high street

Investing in BTR

After the UK government showed its support for the BTR sector with an injection of funding, developers are creating further exciting opportunities. There is a current surge in demand for rental properties which investors can take advantage of in the form of build to rent.

We haven’t been building enough affordable housing for a long time, which has caused a nationwide housing shortage. The housing crisis, coupled with a growing population and home ownership falling further out of reach for many young people has led to an increase in demand for high quality rental properties – and an influx in investment in BTR.

row of colourful houses in cambridge

What makes build to rent interesting is that it takes into account the target tenant in the design and construction of the accommodation. Developers working within the BTR market create modern living spaces designed to be rented out from the get go, with amenities to make tenants feel at home – from gyms and supermarkets to pet sitting centres. With many Brits now renting long term, these large scale rental communities seem attractive to many professionals who prefer the flexibility and affordability of renting.

It offers tenants purpose built, professionally managed rental units, and a very different experience to what they are currently used to. In terms of the return, the BTR market provides an ongoing income stream which is very attractive to investors.

The UK’s housing shortage problem isn’t going to be short term, but building rental properties which are specifically designed for tenants could be a solution. With the market expected to expand in the years to come, now could be the perfect time to invest in BTR.


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