The landscape of the rental sector in the UK is slowly shifting, with big investors and developers finding the market of interest here. Many people rent from small private landlords or the so-called accidental landlords, who are letting property as they don’t want to sell up. Now, corporations and landlords with impressive portfolios are providing competition. They are providing properties and services which really attract tenants. These could be purpose-built rental apartments with amenities such as a concierge, gym, bar and communal lounges or dining rooms to get to know the other tenants or for entertaining guests. Tenants can often get longer leases and, because the landlord is a corporation or professional, they are unlikely to be moved out because the landlord wants to sell the property or move into it himself.

These build-to-rents are helping to meet the ever-increasing demand for housing, whilst also improving the quality and choice for tenants. About 105,000 such homes are being built or planned in the UK, with more than half being in London. This is some contribution to the estimated 250,000 to 300,000 extra homes which need to be built in England to ease the housing crisis. Build to rent is in a good position to meet that demand, particularly as these properties can provide the amenities that millennials and Generation Rent require, like gyms and high-speed internet.

With smaller investors being put off because of increased regulation and stamp duty to pay on second homes, the sector is gaining a more professional feel to it. Statistics from the Institute for Fiscal Studies show that just one in four people born in the late 1980s owned property by the time they were 27, compared to 43% of people born in the late 1970s. There are various reasons why younger people are not buying homes and, for many, it is a lifestyle choice. All this means that more people will be looking for quality rental homes in the future, rather than properties to buy.

For the professional landlord, this offers some security, knowing that their portfolio is a sustainable investment for many years to come. It could also be a good time to look at investing in the build-to-let market as part of a portfolio alongside individual properties. Certainly, the statistics indicate there will be a need for good properties to meet the needs of young professionals for the foreseeable future.

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