While the UK build-to-rent (BTR) sector is in the headlines for all the right reasons and attracting investment from those who can see its huge growth potential and proven resilience, there is still much to do to educate others on the key differences of the BTR sector compared with housing for sale and buy-to-let.
Investors and new entrants already understand the benefits of a sector that offers stable, long-term returns in a country that is experiencing a chronic undersupply of housing and is clamouring for more good-quality rental homes.
For consumers, however, education about BTR will take time and, for many, seeing is believing.
As the sector continues to grow and more renters experience and benefit from professional management, high-quality homes and amenities, the sense of community that sets BTR developments apart from standard rental offerings will strengthen, word will spread and momentum will grow.
At Grainger, this is demonstrated by the speed at which our recent launches are being leased. Of course, many towns and some cities still lack a BTR presence and the education of renters with regard to BTR will be gradual.
For others, including political stakeholders, despite the best efforts, there is still a lot to do in establishing and recognising BTR as a sector in its own right.
With many people either not having the option to buy their own home or the inclination to do so, BTR is a proven solution that provides people with peace of mind that they can stay for the long term, and a professional landlord who will take care of all repairs and building safety.
For consumers, education about BTR will take time, and for many, seeing is believing
With demand growing for professional, high-quality homes across the UK, policymakers still fail to recognise the vast differences between a homes-for-sale developer and a BTR developer and long-term operator.
One recent example of this failing is the proposed Residential Property Developer Tax. The principle behind it is clear, understandable and laudable – transferring the cost of cladding remediation from purchasers to the original developer seems appropriate.
However, the application of this tax to BTR investments does not take into consideration that this cost burden is not passed on to the consumer; it already sits with the developer/investor and not with the individuals living in the properties.
If a flaw is found in a BTR building, the landlord must act immediately to keep residents safe and pay for all remediation works. So if cladding remediation and all other repair costs are already covered by the landlord and there is no way in which they can be passed on to the building’s residents, it seems unjust that BTR operators must also contribute to the Residential Property Developer Tax, making its application to BTR somewhat misguided.
This is particularly so considering that BTR operators have not been in receipt of any other government subsidies, grants or initiatives like Help to Buy.
The lack of understanding on matters such as these poses a real risk to what is still an emerging sector, with such policies damaging viability and risking housing supply and choice for years to come. It is also detrimental to the increasing professionalism in the sector that, most of all, benefits the five million and growing households renting privately across the country.
Helen Gordon is chief executive of Grainger