According to research by the British Property Federation and Savills, over the course of the next decade the number of build-to-rent homes in the UK is forecast to rise from 76,800 to more than 380,000. Paul Staley, director at Wise Living, suggests that this is a product of a changing Britain.
Paul explains: “With the ongoing housing crisis, interest rate hikes on mortgages and increased pressure on raising housing standards that are squeezing private landlords, professionally managed BTR homes are becoming more essential in the UK as the buy-to-let industry struggles to keep up with demand as home ownership becomes more unattainable.
“People need a place to call home and it looks increasingly like BTR homes are poised to fill the gap within the housing market and will take a leading role. So, while the origins of BTR were student accommodation and city centre apartment schemes, this will expand into the rise of BTR single-family homes.
“Therefore, the predictions that SFH is expected to grow to 18% of all BTR stock from its 12% today is not a surprise. More people, right across the UK – not just in cities – want to rent a family home.”
This change in the UK housing landscape is also influencing the behaviours of property stakeholders who are responding to these trends, according to Paul.
Paul said: “For investors and housing developers, this has meant a shift in the types of portfolios they are creating. It makes sense to diversify and spread both the risk and opportunity. They are doing this by looking outside of the more established BTR markets and into SFH in suburban towns.
“In fact, as the UK follows European trends and continues to change from a buying generation into a renting culture, it is highly likely that SFH will outpace other types of BTR housing eventually. At Wise Living, we have seen this demand in action, with over 15 schemes delivered in the past few years and a healthy pipeline of single-family BTR developments.”
As the industry grows this will inevitably increase the number of BTR specialists who will enter the market too, however, this needs to be approached with caution, explained Paul.
Paul said: “The industry has grown considerably over the last decade, but its success is dependent on the knowledge of the BTR specialists who need to guide investors, developers and local authorities in making the best decisions. Everything from location, housing layouts and types must be looked at and specifications developed to maximise return on investment, while also providing housing that is both high quality and value for money.
“The earlier the conversation when it comes to coordinating value for BTR opportunities makes the process more efficient, less risky and speeds up return on investment.”