Foxtons is extensively praising the apparent benefits of Build To Rent, a sector in which the agency is keen to become active.
Sarah Tonkinson, Foxtons’ managing director for institutional renting and Build To Rent, says in a new report: “In the UK we were a little late to the Build to Rent party, and while we’re behind the US, Germany and the Netherlands we are catching up fast.
“Renters in Build to Rent developments are buying into a lifestyle. Their every need is catered for. Everyone is equal as everyone is renting. The leases are long and the community feeling is strong. The wider market needs to take notice of Build to Rent developments as they’re the benchmark to which eventually all landlords will be held.”
Tonkinson says there are four key factors she wants to emphasise.
1. A renting revolution: Build To Rent housing stock in London increased 24 per cent in the last 12 months, with almost 55,000 further homes under construction in London now. Demand is high, with 27 per cent of Foxtons BTR units let within one week of coming to market, compared with 16 per cent for the rest of the private rented sector;
2. Community is the cornerstone for Build to Rent appeal: 43 per cent of BTR properties are occupied by one resident (34 per cent of properties are let to just one tenant in the wider market) and 45 per cent are let to two people. The community feel of BTR’s shared work and social spaces, together with the organisation of events, provides a real alternative to the social interaction people achieve when considering a traditional rental property;
3. Value for money: While BTR average rents are higher than the local market average, BTR residents get more ‘bang for their buck’, insists Foxtons. Over half of these developments have a gym on-site and almost a third provide residents with access to a rooftop area with views of the capital;
4. The impact on private landlords: The agency claims BTR is raising the bar for resident expectations. Private landlords need to take notice of why these developments are so appealing and what this means for their offering. Quick wins that could help private landlords remain competitive may include installing bike storage and allowing pets; speedy resolution of issues and pro-active maintenance; and highlighting amenities within a few minutes’ walk, including gyms, green space, parking and co-working office space.
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How do build to rent schemes compare on price against local BTLs, are they more expensive? When I read the early coverage about build to rent, rents seemed to be a premium with in-built annual rental increases.
The problem with BTR schemes is they are often poorly built, provide small living spaces, are overpriced and won’t deliver their projected ROI. The reason for their existence is the perception that first time buyers can’t compete with small investors who need to be penalised with unfair taxes while BTR schemes are encouraged. A secondary reason is the Government's desire to regulate a smaller number of bigger landlords. It’s all great in theory but the danger is the outcome in our short term society is overpriced rabbit hutches for the masses
Looks like Foxtons are jumping on this bandwagon perhaps if one could speculate that individual landlords might be leaving them and they want to be sure to align themselves with the BTR sector.
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