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Build to Rent (BTR) and who does it benefit?

It's one of the fastest growing trends in the lettings sector, but exactly what is Build to Rent (BTR) and who does it benefit?

You've probably seen them springing up around London in recent years, shiny new apartment buildings where everyone who lives there rents, with no option to buy. These attractive new developments are part of a burgeoning sector in the property market known as Build to Rent (BTR), and if the pundits are to be believed, they will not just be popping up in major cities, but with suburban areas also predicted to get their fair share.

So what's the appeal of BTR schemes? Well from a developer's perspective they offer long term, steady rental yields, with many institutional investors also getting in on the act. However, BTR is attractive to any investor seeking to capitalize on the growing demand for good-quality rental properties.

High earning, young professionals tend to be the target market for BTR schemes, and from all the evidence, they are lapping them up. The fact that the owner or operator professionally manages the entire development is a big draw for this demographic, which does not want the hassle of dealing with an obstructive or unreliable landlord. What's more, they come with transparent, flexible contracts, no up front fees and longer tenancy options of three years or more.



However, it is the lifestyle that these properties afford, that really seals the deal. Typically a BTR development will provide tenants with a brand new, fully equipped, furnished home, with features such as concierge service, on site gym, landscaped communal gardens, balcony or rooftop views, community spaces and even events programs. In short, they come with a ready-made social life, should you want it, and all within easy reach of amenities and transport links. Better still for animal lovers, many are also pet friendly.

But as you'd imagine such freedoms and luxuries do not come cheap, with research showing that on average, rental on a BTR is 15 per cent higher than on an individual, private tenancy. However, tenants are seemingly willing to pay over the odds for a high-end, positive rental experience.

At present, most BTR developments are concentrated in major cities and targeted at young professionals. However, it's predicted that suburban living for families will become a hot new BTR growth area. These developments will likely comprise of houses as opposed to flats, with the focus on infrastructure and proximity to schools rather than business districts.

Whatever direction this sector goes in, it looks like BTRs are here to stay, satisfying a gap in the middle of the market for those who want good quality, rental accommodation.


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