Wednesday 26th June 2019


Build to Rent homes cost 15% more than other private rentals

Investor demand from corporate landlords, often backed by institutional finance, is growing and that is pushing up rental values across some parts of the UK, new research suggests.

These large companies operating Build to Rent blocks promise professionalism, high-level services and stable pricing designed to promote long-term renting, but at what cost to the tenant?

New research by ideal flatmate has looked at the cost of Build to Rent compared to the buy-to-let market and found wide cost disparities.

On average, the cost of renting a room in a Build to Rent development is 15% higher than the cost of renting in the buy-to-let market - £868 per calendar month (pcm) on average compared to £752pcm.

Of those build-to-rent developments that are more expensive, costs range from 4% to 44% more than their comparative local rental markets.

However, ideal flatmate points out that the cost renting in a Build to Rent development often includes bills, gym memberships, parking, among other benefits.

Co-founder of ideal flatmate, Tom Gatzen, said: “Build-to-rent has come under scrutiny due to the higher rental costs but when you consider the additional benefits there is a very strong argument that these developments provide much better value for money.

“For a start, they are new builds so the quality is very good and they have a much more professional management structure in place to support tenants when compared to the traditional communication chain of the tenant, letting agent and landlord.

“They also offer a lot more for your money in terms of amenities included in the price, with many providing wifi, bills and a gym as standard. This comes on top of other benefits such as parking and private gardens and while you pay more as a lump rental sum for these benefits, the convenience of paying for everything in one go is something that appeals massively to today’s generation of tenants.”

Recent research by Savills predicted the build-to-rent market will soon account for a third of the private rental market.

Gatzen added: “We are crying out for more rental stock across the UK and the number of us reliant on the private rental sector is only going to increase.

“Build to rent provides a great solution when it comes to providing more homes at scale and while change will always be met by a degree of criticism by the industry, we must surely focus on the need of the tenant first and embrace anything that helps provide more roofs over heads.”


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