No slowdown for BTR pipeline in the Northwest
Mary-Anne Bowring 11/09/2019
2481
Premium Appeal of Build-to-Rent Properties
Build-to-rent (BTR) properties continue to command a premium, but the focus is on the quality of the product rather than pounds per square foot. Key points include:
- Rental growth for July was around 1.13%.
- Andrew Cook from M&G noted potential pricing pressures as more schemes enter the market.
- Low entry costs for BTR flats make renting more accessible.
Shifting Lifestyle Choices
Renting is becoming more appealing, with:
- Renters preferring a transient way of life with easy entry and exit options.
- A positive response to being treated as customers rather than tenants.
- Quick resolution of maintenance issues.
- Growing interest in longer-term leases.
Manchester: A Test Case for BTR Growth
- BTR investment in Manchester reached £1.4 billion this year, making it a hub for BTR development.
- Manchester City Council anticipates an undersupply, but Section 106 requirements are slowing consents.
- High demand for one-bedroom homes highlights a lack of family-friendly housing in Manchester city centre, as noted by Tim Heatley from Capital and Centric and Chris Shaw from Urban Splash.
Future Development Considerations
- Town centres need to adapt to accommodate families.
- Rural BTR schemes could become viable with innovative approaches, such as pre-approved mortgages where buyers pick homes on-site.
- While city centres dominate BTR development, building an investment case for other locations remains a challenge.
The Rise of ‘Alternative’ Housing
54% of housing investment in the North East is now for ‘alternative’ homes, such as BTR and student accommodation, according to Lambert Smith Hampton.
Successful student housing developments in Manchester and other university towns are providing a model for future projects.
Diversification and the undersupply of high-quality residential housing are shifting investment focus to residential portfolios over commercial property.
BTR as a Potential Separate Asset Class
With growing popularity and investment, there is even an argument to classify BTR as its own distinct asset class.
Planetrent Properties
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Under Offer: This term applies to a property where the landlord is considering an offer but remains on the market. It implies that further offers may still be considered until the landlord formally accepts or declines the current offer.
Let Agreed: This term indicates that a landlord has provisionally agreed to enter into a rental agreement with a prospective tenant, pending additional checks and referencing. It doesn't require the prospective tenant to have paid a holding deposit.
Let: This term signifies an established binding rental agreement between the landlord and tenant.
For both lettings and sales, the guidance addresses additional terms:
New On The Market: This term is used for a property not advertised since its last sale or rental. It should only be used for a brief period.
New Instruction: It applies to a property assigned to an agent for marketing recently, even if it was previously listed with another agent without being sold or rented.
New and Exclusive: This term refers to a property that is either new on the market or a new instruction, exclusively available through a specific agent or portal.
New Method of Sale/Let: This term is used when a property is being marketed for sale or rent using an alternative approach to the original advertisement, such as transitioning to an auction or sealed bid.
Reduced: This term indicates that a property's price has recently been reduced. The reduction should be genuine and comply with the Chartered Trading Standards Institute's guidelines on pricing practices.