It was only a matter of time before renter-exclusive homes arrived on the market. In the last decade, the number of people in the private rental sector has grown by 63 per cent, and it’s set to account for a quarter of all UK homes by the end of this year.
Savvy developers saw an opportunity to cater to a growing demographic and brought the multi-family home formula over from the United States. The result is build to rent (BTR), new-build homes designed and constructed exclusively with renters in mind.
Over the last few years, the number of developments either completed, in development or given planning permission has surpassed 150,000. But where are the best build-to-rent homes, and what type of options are available to renters?
In this article, we’re looking at which cities have the largest concentration of BTR units, as well as other areas where different formats of BTR have become popular. From London to Manchester, find out where the best build to rent homes are located.
It won’t come as a surprise to learn that London is the primary hub for build to rent in the UK. Of the 150,000-plus BTR homes, almost half of them are in the capital. It’s a property hotspot, and even with some people leaving the city amid Covid, London still holds appeal with developers.
There are almost 10,000 BTR homes under construction, plus another 30,000 in the planning stage. Many of the constructed developments feature in a variety of neighbourhoods, including prime postcodes like Canary Wharf, Camden and Nine Elms, as well as Greater London areas such as Hayes, Wembley and Greenford.
London’s housing market is in continuous low supply, and BTR homes are seen as one of the answers to the capital’s housing crisis. While still in its infancy, there’s scope for build to rent to become a market leader in the rental sector, with some of the best build-to-rent homes located in London.
Primary build-to-rent operators in London
Over the past 10 years, Manchester has seen extensive regeneration, with MediaCityUK bringing thousands of jobs to the city. There are also three universities, cultural landmarks, a strong culinary scene and world-class nightlife.
Amid the buzz is a plethora of new skyscrapers, many of which are BTR homes. Manchester is the second-largest build-to-rent hub in the UK, with these renter-first homes forming a major part of the property boom here.
With the city’s population set to increase to 100,000 by 2025, the uptick in new homes is unsurprising. Of the new-build properties in the city, 5,500 of them fall into the build-to-rent category. Institutional investors and pension funds are particularly active in Manchester, using BTR developments to achieve strong rental profits.
Primary build-to-rent operators in Manchester
The UK’s second city isn’t as far along the production line as London and Manchester, but it’s found its way into third place in the UK for build-to-rent homes. There are 5,000 new homes currently under development in Birmingham, and a third of these will be in the guise of build to rent.
It makes sense for investors to focus their efforts on Birmingham; after all, it’s the UK’s largest city for private rented homes after London. In 2019, transactions in Birmingham’s rental sector totalled £327m, with 21 per cent of households currently renting.
Birmingham also has one of the country’s youngest populations, a prime renting demographic. As demand for growth continues, build to rent can fill the gap and prove to be a savvy investment spot for BTR properties able to benefit from the city’s current housing climate.
Primary build-to-rent operators in Birmingham
While larger cities are the primary centre stage for build to rent, commuter towns close to these metropolitan areas are creating demand for BTR properties. Within a 50-mile radius from London, several towns have become build-to-rent hotspots, including Crawley in West Sussex, Milton Keynes in Buckinghamshire and Stevenage in Hertfordshire.
In Manchester, nearby areas like Salford have seen significant regeneration and plenty of new build-to-rent homes. Salford Quays, in particular, is seeing a build-to-rent explosion. While the focus has renewed in areas on the outskirts of Birmingham and Liverpool.
With an increasing number of people open to the idea of living outside of the city, areas like Crawley and Stevenage look even more appealing. BTR developers are finding ways to diversify options away from the UK’s major hubs, meaning the best build to rent homes can be found all over the UK.
Different types of build to rent homes
Build-to-rent is fluid in its setup, offering options for all ages and demographics in the private rental sector. BTR’s diversity is one of its core strengths, as it aims to create communities of like-minded people.
The most traditional form of BTR, multi-family homes describe apartment blocks with hundreds of units. These buildings often feature social spaces where renters can interact with each other. Spaces often feature a lounge for renters, on-site gym and co-working spaces.
The latest trend from the US, single-family homes is one dwelling instead of a building with multiple units. They are more popular with families and can be found in suburban areas on the outskirts of major cities. There are just over 5,000 single-family homes in development in the UK.
Co-living spaces borrow from the multi-family homes format with on-site social spaces and renter-specific amenities. However, unlike multi-family homes, co-living is more akin to a five-star student dorm. Residents have a room (rather than a whole apartment) and share the spaces like kitchens, lounges and, in some cases, bathrooms.
The best build to rent homes
For anyone thinking about build to rent as a serious investment, the big cities still make up the crux of units. The lifestyle of BTR suits larger cities, especially in places like Manchester, where there is significant room for expansion. If investors can find up-and-coming locations with good facilities, transport connections and a strong community, any area is ready for the build-to-rent boom.