The UK is in desperate need of more homes. As the shift from owner-occupied homes to rented homes continues to be the new normal, the number of rented homes available needs to expand.
The problem is, the punishing additional 3% stamp duty on buy to let homes means that 69% of landlords have been put off investing in further rental property, according to the Residential Landlords Association.
Jonathon Ivory, Managing Director, Atlas Residential, says: “Just as the UK needs more rental homes than ever before, the stamp duty change has significantly dented investors’ interest in providing those homes.
We’re in danger of seeing a real vacuum in the buy to let market – many of those submitting their tax returns this April and May will be thinking carefully about alternative ways to make money. Thankfully, the build to rent sector is growing rapidly, providing the UK with the means to fill that vacuum.”
According to the Institute for Fiscal Studies, just 25% of those born in the late 1980s owned a home by the age of 27, compared with 43% of those born in the late 1970s. The situation is not going away, but the buy to let landlords are.
The changes are setting the scene beautifully for an influx of build to rent developers looking to create the next generation of rental homes. Packed with purpose-built facilities for socialising and working from home, build to rent schemes elevate rented housing to the next level.
Build to rent is still in its infancy in the UK, with just 105,000 units either complete, underway or planned, compared with a UK population of 65 million people. However, with buy to let rapidly losing its charm in investors’ eyes, it’s time for the build to rent sector to grow up fast.
Jonathon concluded: “Build to rent provides an unprecedented opportunity to put renters’ needs first. Renters can enjoy premium facilities that have been shaped around the contemporary urban lifestyle. Demand for homes in the UK is stronger than ever and the build to rent sector is ideally positioned to meet that demand. It is also well placed to adapt to the changing needs of the market. As the build to rent sector in the UK evolves, family homes are starting to take shape.”