The build-to-rent (BTR) sector has been experiencing a significant boom over recent years, revolutionising the real estate market and changing the way we think about renting especially in major and regional cities. This surge in BTR developments is not just a trend but a response to evolving tenant demands and a shift in private and institutional investor interest towards more stable opportunities.
Rise in Build-to-Rent Developments
Over the past decade, BTR developments have seen a notable increase, particularly in urban areas. Cities like Manchester, London, and Birmingham are at the forefront, with sleek, purpose-built rental properties designed to cater to modern lifestyles. These developments are a far cry from traditional rental properties, offering high-quality living spaces, communal amenities, and flexible leasing options in some cases. We are also seeing the rise of Co – Living with a rise of smaller apartments i.e. studios and one bedroom apartments with a bigger focus on the communal and amenity areas for residents in the building.
One standout example in Manchester is Moda Living, a prominent BTR developer with seven impressive projects in the city. Moda Living’s Angel Gardens has been particularly successful, setting a high standard for luxury rental living with its extensive amenities and prime location. We have also seen in this area following on from the success of MODA an array of new developments which offer an array of amenities as well as much in the pipeline – as an example and one of our best investment opportunities FEC’s Falcon development which has high quality new build apartments with access to a 6 storey clubhouse.
Investor Interest in Build-to-Rent
Investors are increasingly drawn to the BTR sector due to its resilience and potential for steady returns. Unlike traditional property investments, BTR developments provide a more predictable income stream, with longer tenancies and lower vacancy rates. The appeal of a fully managed, hands-off investment also adds to its attractiveness, especially for those looking to diversify their portfolios without the hassle of day-to-day property management.
Positive Impact on the Buy-to-Let Market
The rise of the BTR sector can also positively impact the broader buy-to-let market. As BTR developments set new standards for rental properties, traditional landlords are encouraged to upgrade and improve their offerings to remain competitive. This can lead to an overall enhancement in the quality of rental housing, benefiting tenants across the board. The influx of high-quality BTR units can also help stabilize rental prices, preventing excessive hikes and ensuring affordability.
Moreover, BTR schemes serve as indicators for buy-to-let investors, highlighting areas and cities with strong rental demand and growth potential. Successful BTR developments like those by Moda Living signal robust market conditions, making them attractive targets for traditional buy-to-let investments. Investors can leverage this data to make informed decisions, targeting regions poised for long-term rental growth.
Meeting Changing Tenant Demands
Today’s tenants prioritize flexibility and a higher standard of living. The BTR model addresses these needs by offering:
- Flexible Lease Terms: Tenants can choose lease durations that suit their lifestyle, providing the freedom to move without the long-term commitment, however most tenancies will still be a minimum of 6-12 months.
- Enhanced Amenities: From on-site gyms and co-working spaces to communal gardens and concierge services, BTR developments offer amenities that enhance the living experience.
- Community Focus: These developments often foster a sense of community through social events and shared spaces, appealing to those looking for a more connected living environment. This is especially important when we are seeing people rent for longer and looking to incorporate long term renting into their lifestyle.
- Quality and Maintenance: Professionally managed properties ensure high standards of maintenance and prompt service, contributing to a hassle-free living experience.
Moda Living exemplifies these trends, with its Angel Gardens development offering residents amenities like a rooftop sports pitch, cinema room, and gym, creating a vibrant community atmosphere.
Impact on Tenant Expectations
The success of BTR developments like Moda Living’s Angel Gardens is raising the bar for what tenants expect in rental properties, especially in city centres. Tenants are increasingly looking for modern, well-maintained homes with a range of amenities and a sense of community. This shift in expectations is pushing both BTR developers and traditional landlords to offer more to attract and retain tenants. It’s therefore imperative as a potential investor to be aware of these trends when looking to buy a property as it will have an impact on the property appreciation and appeal when it comes to renting the apartment.
Summary
The growth of the build-to-rent sector is a clear indication of the shifting dynamics in the real estate market. As more tenants seek flexibility, quality, and community in their living arrangements, and as investors look for stable and hands-off investment opportunities, the BTR sector is poised for continued expansion. This trend not only reshapes urban living but also sets new standards for rental properties, benefiting both tenants and investors alike.
With developments like Moda Living’s Angel Gardens leading the way, the future of urban living looks set to be more flexible, community-oriented, and enriched with amenities that cater to modern lifestyles. The positive ripple effects on the buy-to-let market and tenant expectations promise a more vibrant and high-quality rental market for all. For buy-to-let investors, the success of BTR schemes offers valuable insights into prime locations for investment, ensuring strong rental demand and growth potential in targeted areas.
