BTR: Transforming the UK Rental Market

The Build to Rent explosion: predictions for the year ahead

The UK’s property landscape is evolving, with BTR and multi-family emerging as a major player. Unlike traditional housing developments, BTR projects are purpose-built for long-term renting and cater to modern renter’s needs, often featuring high-quality amenities like gyms, communal lounges, coworking spaces, and in some cases, pools on the roof! These developments also come with on-site management and maintenance, creating a seamless, community-driven living experience.

As Managing Director of BTR at The Focus Agency Group, I’ve witnessed the BTR and multi-family explosion, often called upon for comment. With this in mind, I wanted to share some answers to questions I’m asked regularly and share my predictions for the year ahead.

What sparked the growth?

• Affordability challenges: Rising property prices, especially in cities like London, make homeownership increasingly difficult. This is particularly applicable to the first-time buyer market who, without support through schemes like Help to Buy, have an even bigger hurdle to climb in finding their 10-15% deposit, or in some cases – according to a recent Zoopla stat – the 33% needed in London.
• Changing attitudes: Young professionals now see renting as a longer-term solution, prioritising flexibility over ownership and even families are looking to BTR as a solution for changing circumstances, such as job relocation and separation. The professionally managed, greater security provided by BTR compared to what private landlords can offer is positioning multi-family rental as a stable way of living.
• Government support: Increased housing and multi-tenure partnerships on developments are the best way forward moving towards ‘hypermixity’, which is proven to create more sustainable, long-term neighbourhoods and communities.

What are the key benefits of Build to Rent

• Enhanced resident experience: Build to rent homes offers professionally managed, high-quality properties with community amenities.
• Flexibility: Some properties have zero deposit options and resident-only break clauses.
• Reduced housing pressure: With private landlords exiting the market due to EPC upgrade requirements and higher property taxes, there’s a need for increased rental homes to address supply and demand balances and avoid extortionate prices.
• High-quality stock: BTR properties are typically new builds, offering high-quality, energy-efficient homes that meet modern standards.

Challenges Ahead

Despite its benefits, BTR faces hurdles. Affordability remains a concern for middle- and low-income renters, but there are options with lighter amenity that are slightly more affordable. Planning in general is an issue, which the government is trying to address to help new homes all round, including BTR projects.

The renter’s reform bill – while Scotland is trying to find its feet with their own reform bill, there’s still a lot of unknowns at this stage for England so it remains still to be seen in terms of impact here.

The Future of BTR

BTR is transforming the UK rental market by delivering a flexible, community-oriented living experience and redefining what renting can look like in today’s housing landscape. With the government’s active interest in developing a long-term housing strategy, this opens significant opportunities for the BTR sector to start to become part of the fabric of society, addressing current housing demands and setting a foundation for future developments. With investment potential estimated at £100 billion, BTR will likely expand beyond major cities to regional hubs that are deemed ‘commuter locations’ such as Milton Keynes, Bedford, Dartford etc. This will likely keep up with demand as the appeal of BTR widens to a growing resident base in the UK (from late teens – to a 99 year old lady at Wembley Park!) and with this appeal set to potentially widen further as we move into the next generation of rental living product.

As resident’s demands shift, we can expect future BTR developments to integrate sustainable practices, energy-efficient designs, and smart home technology, making them very attractive options for a modern-day renter.