Carry on rent­ing... and bring the dog, cat and the kids too

The Daily Telegraph - Property - - Front Page -

these kinds of de­vel­op­ments, which are pur­pose-built for renters, have pro­fes­sional land­lords and are backed by in­sti­tu­tional in­vestors such as pen­sion funds. They started ap­pear­ing in around 2012 in cen­tral London and Manch­ester. In prime lo­ca­tions, and of­ten with a concierge, boast­ing gyms, swim­ming pools and spas, they were de­signed with high-earn­ing mil­len­ni­als and work-hard-play-hard pro­fes­sion­als in mind.

First-time tenants sav­ing for a de­posit were not the tar­get, yet these schemes – dubbed build-to-rent – were hailed to be one of the ma­jor so­lu­tions to the UK’s wide­spread and chronic hous­ing cri­sis.

Six years on and these swanky flats are still be­ing de­vel­oped: Rich­mond Mews in Soho, for ex­am­ple, will set you back £3,445 per month for a onebed­room apart­ment. How­ever, the £2.6bil­lion build-to-rent sec­tor is now evolv­ing to cater for more ten­ant tribes, in­clud­ing fam­i­lies and older peo­ple. There’s now a recog­ni­tion that in­fin­ity pools and cinema clubs are not a must-have in a rental com­plex; af­ford­able rents, fam­ily-sized units, and longer-term let­ting agree­ments are the in­dus­try’s new pri­or­i­ties.

“Ini­tially, al­most all in­vest­ment was tar­get­ing schemes aimed at young pro­fes­sion­als in lux­ury city cen­tre lo­ca­tions, at­tracted by the po­ten­tial for higher re­turns from this rel­a­tively wealthy group,” says Nick Whit­ten of prop­erty firm JLL.

He­len Gray, of con­sul­tancy CBRE, agrees: “When the sec­tor was first emerg­ing there was a clear fo­cus on build­ing lux­ury homes in London and Manch­ester. The con­cept was new and there was a lot of ner­vous­ness from in­vestors.” Build-to-rent de­vel­op­ers were also com­pet­ing against tra­di­tional house­builders for sites, which pushed land prices up. A top-end prod­uct there­fore jus­ti­fied the spend, she adds.

But the in­dus­try was miss­ing a trick: the main­stream rental mar­ket ac­counts for 2.5mil­lion house­holds, ac­cord­ing to JLL. Around 500,000 of these homes are lived in by stu­dents, but the re­main­der are key work­ers and young fam­i­lies on a mod­est in­come.

“They tend to live on the pe­riph­ery of re­gional city cen­tres and more than half of these house­holds are in 20 UK cities in­clud­ing Manch­ester, Birm­ing­ham and Leeds,” Whit­ten ex­plains. “There­fore, we need more af­ford­able build-to-rent homes de­signed with these tenants in mind.”

The num­ber of build-to-rent prop­er­ties has in­creased from 0.8 per cent of all new homes un­der con­struc­tion in 2012 to nearly nine per cent in 2017, and

Priya and Michael Wal­ters with dog Bai­ley in their flat in Hayes, main and top right

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