Many buy-to-let investors are looking at the build-to-rent market for new investment opportunities.
The BuyAssociation property investment company reported in August 2016 that there has been a large growth in the build-to-rent property market, and that it could overtake buy-to-let.
Build-to-rent is the process of building new accommodation for the rental property market. These properties are often built in major cities with high demands for rental accommodation. Many of them include energy bills and furniture in the rent and incorporate public areas for socialising. They attract young professionals, many of whom are not planning to own their own homes for the foreseeable future. Tenants are likely to stay for a long time.
They are usually managed by in house teams that organise administration and maintenance.
The construction and management of large build-to-rent developments are normally run by companies, rather than directly by the investors. There can be a number of investors contributing to the finance of a build-to-rent development.
According to the BuyAssociation, investors are offer attracted by assured rental returns and the perceived low risk of the build-to-rent investment market.
Buy-to-let investing has suffered from financial changes with the rise of stamp duty and decreases in tax relief. This has not stopped buy-to let-investing, but some landlords beginning to look at the build-to-rent market to diversify their investment portfolio and take advantage of the perks that come with the market.
For investors who want to buy newly built rental accommodation, there are lenders offering build-to-let commercial mortgages