What Does the Future of the Build to Rent Sector Look Like?

Posted by Build Warranty Group on 7th December 2022 -

The Build to Rent sector is fast becoming an established sector in the UK housing market to meet the demand for purpose-built, well-managed rental properties designed not just for young professionals, but also for growing families.

But, with the ongoing housing crisis, including interest rate hikes on mortgages and increased pressure to raise housing standards.

The demand for rental property continues to outstrip supply – making build-to-rent housing a more attractive investment opportunity for investors and developers in recent years. However, the buy-to-let industry is struggling to keep up with demand as home ownership becomes increasingly unattainable due to a growing population.

People need a place to call home, but many mortgage buyers, especially the average first-time buyers, are increasingly finding it difficult saving for a mortgage deposit. It looks like the BTR market can bridge the gap within the housing market and take a leading role.

Build Warranty’s build-to-rent clients say the concept has significantly strengthened throughout the last 18 months, as people’s priorities have changed towards home working spaces and outdoor environments, along with better amenities, pushing up standards across the board.

Research from analysts at British Property Federation (PBF) and Savills predicts that by 2032, 8% of UK homes will be purpose-built. While the sector would still represent a small proportion of new housing delivery, the sector will set to be worth £170bn. 

It is very clear that the current market conditions underline that we must continue to diversify the housing supply to drive economic growth, and the Government must continue to look at how planning reform, more support for local authorities and the release of land for development can enable the sector to continue its upward trajectory.

As the Build-to-rent sector continues to be an increasingly favourable bet for long-term institutional investors, it’s important to be aware of the risks involved. One of the biggest risks is the possibility of latent defects – hidden problems with the construction that only become apparent after the development is completed. 

Investors should consider if they need a structural warranty in place. This is especially true if it is deemed unlikely that the units will need to be sold, either to another investor or on the open market.

Our tailored warranties can offer you valuable financial security should you need to claim against structural defects from the beginning of construction up to 10 or 12years after the completion certificate has been issued.

At Build Warranty, we are proud to provide our clients with the clear and most concise information possible so they can make the best-informed decisions for their needs. We want to give our clients the peace of mind that comes with knowing they have been professionally advised.

For further advice or to obtain a quote, call Build Warranty’s experts on 0800 5200155 or complete a simple online form: Click here.

Further information is also available at www.buildwarranty.co.uk