The latest British Property Federation research shows that Britain is swiftly moving to a renting culture. The report suggests exceptional growth in the Build to Rent sector. The number of BTR homes will multiply fivefold from the existing 76,800 to over 380,000 within a decade. BTR homes are increasingly preferred by tenants due to their professional management.

Private residential landlords, often called PRS landlords, continue to feel the pinch of taxes and regulations

Besides the demand-supply gap, multiple factors contribute to the BTR sector's growth. There is mounting pressure on landlords to raise housing standards, led by Michael Gove. The EPC regulation changes are impacting the feasibility of homeownership in Britain as many such of UK private residential landlords own aging Victorian and Edwardian housing stock that requires multiple expensive upgrades to reach EPC grade C.

There is no guarantee that inflation and interest rates will ease soon as the world is battling a recession. These factors impact tenants’ rent-paying ability and landlord buy-to-let mortgage costs. The recent announcement of the Autumn Budget 2022 offers no comfort to private landlords who struggle to balance the rental income they receive against hikes in taxes and the inability to deduct mortgage loan interest costs.

Also, landlords who have moved rental properties into limited companies who are paying higher taxes from since 2023 as corporation tax increased to 25%. The upcoming EPC regulation will cost landlords dearly because often they must incorporate multiple improvements to reach EPC grade C.

There are signs that interest rates will continue to rise, and the government may scrap national house-building targets. All this paves the way for robust demand for UK tenants-what-it-means-for-the-uk-build-to-rent-sector'>Build to rent homes.

Renting culture influences stakeholders in the property market

Renting culture influences stakeholders in the property market

UK BTR appears to provide relief to the UK's rental market as the buy-to-let industry struggles to meet the rising demand for rental homes. BTR homes help people fulfill their dreams of living in a professionally managed home that offers superior living standards and helpful amenities.

City Centre Build to Rent homesteader for the shortage of student accommodation and lifestyle apartment living. Growing too is the growth in Single-Family Homes, low rise in commuting distance of towns and cities. The wider availability of suitable sites for Single Family Housing is the pushing expansion of the Build to Rent landscape across the UK and into suburban towns.

The private equity sector and banks perceive the BTR market to be a promising opportunity for diversification into various portfolios. This is driven not only by the chronic shortage o housing, but also by the fact that the residential rental is counter-cyclical, cyclical, and assuming no rent controls are linked to wage growth also. Hence, several banks are planning to become landlords by investing in the BTR sector. And, the UK Housing Growth Partnership is Bank-funding funded scheme.

Addressing the chronic demand-supply gap

Addressing the chronic demand-supply gap

The Build to Rent concept is finally maturing as 2022 marks the tenth anniversary of the Montague Review, which set the ball rolling for purpose-built homes for rent. The government supported the expansion of the BTR sector by releasing more land and regularizing renters' rights. The proof of BTR's widespread acceptance is the construction of 76,800 BTR homes through a 30 billion investment.

There are over 163,400 BTR homes in the pipeline, underlining the bright future of the sector. The estimates confirm that the next decade will witness the completion of over 380,000 BTR170 billion 170 billion investment. The spread of BTR homes into suburbs and small towns will drive the next phase of BTR growth.

According to some estimates, over 27.6 million families will require housing by 2041 at the current rate of population growth. It assures developers of consistent growth in the need for more households. On-site amenities like concierge service, security, gyms, and other services are clear differentiators to attract tenants. There is a need to boost the reputation of the BTR sector by delivering quality homes and catering to the broad choice of diverse tenant segments.