In the UK, while homeownership is still the ultimate goal for many, there has been a distinct shift towards people renting for longer than ever. This actually mirrors behaviours in many other countries, particularly the US, Germany and the Netherlands, where less focus is placed on owning bricks and mortar and people are more keen to live in high-quality rental homes instead.
Build-to-rent market in the UK is picking up pace since the pandemic. Between Q3 2020 and Q3 2021, the number of build-to-rent homes coming to market grew by 26%. In numbers, there were 63,950 completions, up from 50,798 last year. There was an 8% increase between 2020 and 2021 of developments in the construction stage. In the planning stage, there was a rise of 10%, from 90,412 to 99,543. The figures show just how huge the sector will be once the unbuilt developments are completed in the years to come.
Rents in these apartments tend to be higher because of the higher standard of living that comes with it. Because tenants are choosing a more premium option for their accommodation, they also tend to stay put for longer. Some build-to-rent developments offer longer tenancy agreements, which provides more stability for the investor as well as the tenant. It also minimises void periods where rents are lost.
The biggest proportion of properties, and flats specifically, on the rental market is in Edinburgh, where of the 562 total rental properties, 505 (90%) are flats. In Glasgow, 89% of all rental homes are flats. Further down the list, but still with a generous amount of flats on offer, are Newcastle (79%), Manchester (73%), Sheffield (68%) and Nottingham (66%).