Build to rent firmly on the agenda for 2017

Build to rent firmly on the agenda for 2017

There is no doubt that 2017 is likely to be an economically turbulent time, not least for the housing sector. And with supply and demand issues in the property market at an all-time high, the UK government is now looking to the build-to-rent sector to plug some of the gap.

Housebuilding is a political hot potato at the moment and, not surprisingly, given the level of the housing crisis we’re experiencing, it’s found its way to the top of the political agenda, with all parties agreeing that there is an urgent requirement for new homes to be built.

The UK government has already set itself a target of one million homes to be built by 2020 but, in a Post Brexit environment, there are now serious concerns that this target will be hit given the economic uncertainty and how that might impact on traditional housebuilding.

£1 billion fund for build-to-rent

Worst case scenario is that the UK economy deteriorates after Article 50 is triggered and the building of new homes suffers because developers believe that they will struggle to find buyers for their new homes. In anticipation of this, the Government is focusing on the build-to-rent sector which historically has been more resilient in the face of economic uncertainty. The Government has announced a £1 billion fund to assist with private investment, planning and construction to give build-to-rent a kick-start.

Currently, around 98% of the rental market in the UK is made up of landlords with relatively small portfolios and the build-to-rent sector is fairly underdeveloped. The potential for build-to-rent in the UK is huge and the demand is certainly there to satisfy it. For the uninitiated, build-to-rent is where homes are specifically built for renting out rather than for sale and typically, its young professionals living in cities that snap up these properties.

A safe investment

Renting suits many young professionals because it allows them the flexibility they want in their living arrangements. The demand for rental property by young professionals is high and therefore its seen as a safe investment for landlords.

2017 is set to be the year that build-to-rent really takes off so if you’re looking for investment opportunities in this sector, please get in touch and we will be happy to guide you.