Build to rent refers to housing that is purpose built for the rental market rather than sale to home owners or landlords.
Build to rent developments are owned by investment bodies such as pension or insurance funds, asset managers or property companies and tend to be a premium option.
In order to be classed as build to rent, a development must have at least 50 residential units under the same management and with a single landlord. They aim to offer a sense of community and will include shared amenities such as gyms, green areas, workspaces and restaurants as well as arranging social events. Tenancies are usually longer than at ordinary rental properties and all blocks have an on-site manager.
The need for build to rent developments
Build to rent is seen as a solution to unscrupulous landlords, poor quality rental accommodation, high fees and unfair rent increases. A survey conducted by YouGov on behalf of the HomeOwners Alliance found that 40% of renters live in cold and damp properties that their landlords will not repair.
Over a third of renters struggled to get essential repairs carried out, while a similar number were required to pay high charges upfront for items such as inventories or the checking of references. One in six renters only have short-term leases and the same amount have experienced unfair increases in their rent.
Build to rent apartment blocks often offer tenancies of three years or more. Future increases will be made clear, with a formula in place for calculating the amount. No up-front charges are made, other than payment of deposits and rent in advance.
The requirement for an on-site manager means that tenants have an easy point of contact for any problems. It is also a requirement that a complaints procedure is in place and that the landlord is a member of a recognised ombudsman scheme.
Availability and cost
There are currently only 20,800 built to rent properties in the UK, with 118,000 in the planning or construction stage. The properties cost considerably more, with a report on build to rent conducted by JLL in 2018 finding that the average build to rent home cost 9.3% above average.
The properties are a popular option and the availability is likely to keep increasing as a better alternative to the current rental model, where tenants often feel at the mercy of their landlords.
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