Build to rent sector grows in the UK

If there were a UK property developers list of companies investing in the build to let sector, it would be a much longer list than one published five years ago.

According to the British Property Federation (BPF), the number of completed build-to-rent projects increased by 23% from 43,598 in Q4 2019 to 53,750 in Q4 2020. The number of projects in the planning process stages and under construction were also up.

Speaking to the Buy Association website, BPF real estate policy director said “(t)he build-to-rent sector has shown its resilience throughout 2020, with investors continuing to drive the sector’s growth across every region of the UK.”

This has led many in the estate agency sector to question the future of letting within their businesses.

Lesley Roberts, partner at property management group Allsop, told The Negotiator, “(i)f letting agents take too larger a slice of the pie and squeeze operators, then using third-parties to source tenants will become unviable.”

She suggested that, to win commissions from build-to-renters to find tenants that they would have to embrace proptech, alter their pricing, and become more specialist. She says the role agents will most likely play as a “top up” service because of their ability to reach wider local tenant markets.

Certain agents have already begun to pivot successfully to the build to rent market like London-based Acorn Group.

Although the proportion of the tenant market currently occupied by build-to-rent firms is small in Britain, its presence does represent an increasing encroachment by large companies into the residential sector driven by investors seeking a return in an era of low interest rates and accelerating asset prices.

In the UK in March 2021, the Financial Times reported that the country’s largest mortgage lender, Lloyds Bank (which owns Scottish Widows, the Bank of Scotland, and the Halifax) was planning to purchase and rent out both existing and new housing stock in Britain by the end of the year. John Lewis announced a similar move last year as it seeks to plug weaknesses in its High Street store property portfolio.

The goal of the move was to lock in regular income through rental payments and capital appreciation over time via house price inflation. Secondary goals included the sale of insurance and rental deposit loans to tenants.

As usual, the UK is following the US in this respect. The build-to-rent market is already well established in America.

Brent Landry, SVP of Development, American Homes 4 Rent, told DS News that the COVID-19 pandemic caused the build-to-rent market to go into “turbo mode” and that, in Q3 2020, the number of single-family build-to-rent starts jumped 27%.

And big banks like JP Morgan Chase and Blackrock were also investing in the purchase of existing homes with the intention to rent them out to tenants – 36% of homes sold in the Phoenix area were to investors in Q1 2021, according to John Burns Real Estate Consulting as reported by The Times.

EAN Content

Content shared by this account is either news shared free by third parties or sponsored (paid for) content from third parties. Please be advised that links to third party websites are not endorsed by Estate Agent Networking - Please do your own research before committing to any third party business promoted on our website.

You May Also Enjoy

Estate Agents should not all look the same
Estate Agent Talk

How to Become an Estate Agent with No Experience

Breaking into the property industry can seem intimidating – especially if you’ve never worked in it before. But the good news? You don’t need years of experience or fancy qualifications to start a career as an estate agent in the UK. In fact, many successful estate agents started with no background in property at all.…
Read More
buying at auction uk
Estate Agent Talk

9 Advantages of Selling Your House by Auction

Selling your house by auction might seem like a daunting prospect, but it comes with numerous advantages that can make it a highly attractive option. While the traditional method of selling through an estate agent has its place, auctions are increasingly becoming a popular choice for homeowners looking for a swift and reliable sale. Here…
Read More
Breaking News

Majority of Tenants Unsure How Changes Will Affect Them, Says LRG

With major changes to the private rental sector on the horizon, 62% of tenants say they don’t know whether the government’s Renters’ Rights Bill will address their concerns – highlighting a growing need for clearer communication around what the reforms will mean in practice. LRG’s latest Lettings Report shows that while landlords are widely aware…
Read More
Home and Living

Perfume Storage Tips: How to Keep Your Fragrances Fresh

Perfumes are sensitive compositions that can be significantly affected by how they are stored. Proper storage ensures that your favorite fragrances stay fresh and maintain their intended scent profile. In this article, we’ll explore practical, fun, and effective tips to help you preserve your perfumes in perfect condition. Understanding the Sensitivity of Perfumes Perfumes are…
Read More
Breaking News

Renters’ Rights Bill Delay Causing Uncertainty for Tenants and Landlords

Ministers need to tell landlords and tenants when measures in the Renters’ Rights Bill will take effect the National Residential Landlords Association (NRLA) is today warning. The Government pledged last year to abolish Section 21 ‘no explanation’ repossessions and to make other changes to the rental market this summer. With the Bill not scheduled to…
Read More
Breaking News

Breaking Property News 02/04/25

Daily bite-sized proptech and property news in partnership with Proptech-X.   Made Snappy 360 appoints new CEO and Sales Director to accelerate growth in the property technology space Made Snappy 360, the fast-growing proptech company known for its virtual tours and floor plan technology, has appointed industry veteran Mark Beresford-Ward as its new Chief Executive…
Read More