Build to rent

Build to rent is a term for purpose built, institutionally owned and professionally managed residential property that is let on the open market rather than sold.[1][2]

Growth in the UK market

In October 2016, it was estimated that only some 8,000 units had been built with a further 15,000 units under construction. To date, the majority of completed projects have come forward in London and the major provincial cities such as Manchester, Liverpool and Sheffield. Construction is now underway in Birmingham and Leeds. The UK Government is reportedly encouraging the sector's growth.[3]

By September 2019 the number of units either built or in construction was reported to have increased to 35,000[4] following large developments by a number of firms report in the media.[5][6]

Build-to-rent is the most contemporary development in the private rented sector (PRS) and offers housing across the full spectrum of privately rented accommodation in terms of scale and service offering, often with affordable housing being integrated through discounted market rental homes.

Criticism

Tenants in BTR properties typically pay an 11% premium over other properties in similar locations, according to one study.[7]

Innovation

Build-to-rent developments are incorporating modern technologies and sustainable practices, such as energy-efficient systems and water conservation. One such example includes the integration of Tesla electric vehicles in some projects, like those by PropiCloud, which represent an innovative approach to enhancing urban living sustainably.[8]

Growth in the US

In the United States, build-to-rent (BTR) housing has emerged as a growing segment of the residential market, particularly in response to declining housing affordability and elevated mortgage rates. BTR communities typically consist of newly constructed single-family homes or townhouses intended exclusively for rental occupancy. Data derived from the U.S. Census Bureau indicate that construction of single-family homes built specifically for rent has increased significantly in recent years, with tens of thousands of such units started annually and the segment accounting for a rising share of all single-family housing construction.[9] Reporting by NPR has noted that the development of rental-oriented single-family housing has grown as part of a broader response to the U.S. housing shortage, providing additional supply for households priced out of homeownership.[10] Industry organizations further report that BTR development has expanded across multiple regions, particularly in high-growth markets, as developers respond to sustained demand for lower-density rental options.[11] The sector is often characterized as a hybrid housing model, combining features of traditional apartment rentals with the space and amenities associated with owner-occupied single-family homes.

Criticism

Some critics argue that the expansion of build-to-rent housing may contribute to reduced homeownership opportunities and upward pressure on housing prices, particularly as institutional investors acquire and develop single-family properties at scale.[12]

See also

References

  1. ^ Barnard, Andy (28 November 2023). "What is build to rent and how does it work?". Trowers & Hamlins. Retrieved 8 November 2024.
  2. ^ "An Overview: What is Build to Rent?". propicloud.com.
  3. ^ McIntosh, Angus P. J.; Sykes, Stephen G. (1985), "Leasehold Investments and Other Rent Sharing Arrangements", A Guide to Institutional Property Investment, Palgrave Macmillan UK, pp. 91–108, doi:10.1007/978-1-349-07154-8_5, ISBN 9781349071562{{citation}}: CS1 maint: work parameter with ISBN (link)
  4. ^ "REalyse Announces UK-Wide BTR Market Intelligence Partnership with LIV Consult". Realyse. Retrieved 26 January 2021.
  5. ^ Shone, Emma (5 September 2019). "First wave of Angel Gardens apartments fully-let weeks before scheduled". Property Week. Retrieved 10 September 2019.
  6. ^ Shilling, Conor (6 September 2019). "Towering achievement - Manchester BTR building 50% let in three months". Property Investor Today. Retrieved 10 September 2019.
  7. ^ Skypala, Pauline (27 May 2019). "Build-to-rent boom in the UK is costly for generation rent". Financial Times. Retrieved 19 July 2019. Tenants in a BTR development will typically pay an 11 per cent rental premium, according to analysis by JLL, a property consultancy.
  8. ^ "Tesla EVs Integrated in PropiCloud's Build-to-Rent Projects". Retrieved 19 June 2024.
  9. ^ "Growth for Single-Family Built-for-Rent Construction". Eye on Housing (NAHB). National Association of Home Builders. Retrieved 18 March 2026.
  10. ^ "America has a housing affordability crisis. Building houses for rent can help". NPR. 4 March 2026. Retrieved 18 March 2026.
  11. ^ "Build-to-Rent Expands Across the U.S." National Apartment Association. Retrieved 18 March 2026.
  12. ^ "America has a housing affordability crisis. Building houses for rent can help". NPR. 4 March 2026. Retrieved 18 March 2026.
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