Build to Rent could be the answer to the government’s prayers when it comes to making sure it hits house building targets of a million homes by 2020, but it needs to make sure the industry has all the tools to make its mark, it has been claimed.
Although the government has largely been seen to be against the rental sector in recent years thanks to its changes in taxation for the buy-to-let sector, ministers may well need to turn to the Build to Rent industry that , although still relatively small, has been growing hugely in recent years.
A larger number of tenants are now on the lookout for homes that are built with their needs in mind, and this has helped to boost the building of such properties.
In fact, according to the latest data available from the British Property Federation (BPF), the last year has seen a significant growth in activity in this particular sector. It said that there are 200 per cent more, some 67,000 rooms, now either approved through planning, under construction or completed in the UK.
But although this shows real growth in the market over the last 12 months, experts in the BPF say there is still real potential for further improvements in this sector, with those leaning towards Build to Rent as a potential investment having more than £50 billion to spend, as long as the conditions are right.
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The right conditions, according to the BPF, would involve an improvement in taxation policies for the Build to Rent sector, which would see it offered tax breaks designed to encourage investment rather than putting people off, as Stamp Duty levies have previously been proven to.
High demand from renters means landlords secure high occupancy levels in the sector with relatively low void periods.
It said that buyers from the US in particular are keen to invest in the UK, with this sentiment likely to boost the market here to levels similar to what has been seen in the likes of Germany, Japan, Hong Kong and Sweden in recent years.
“Investors are attracted to the UK’s Build to Rent sector as they understand that there is a high demand for rental properties across the country. They see this type of investment as way to generate an income from a new-build property which will require little work as the asset is fully managed. This factor is a huge plus for overseas investors and, with today’s favourable exchange rates, the UK is a great location for this type of investment,” Dale Anderson, Experience Invest, comments.