Property sector hopes for build to rent tax boost
The British property industry is hoping that Chancellor Philip Hammond will announce tax measures in his autumn statement that will boost the fledgling build to rent sector as a time when more homes are needed in the rented sector.
Figures from the British Property Federation show that in the past year the number of build to rent units with planning permission, under construction or completed in the UK has increased by over 200% to 67,000 units.
The BPF has stressed that although these figures are encouraging, the sector could be delivering far more homes and says that investors have potentially £50bn to invest.
Some American companies have already indicated their desire to get involved in build to rent which is far more popular in the United States. Build to rent is also well established in countries such as Germany, Hong Kong, Japan and Sweden.
New research from Strutt & Parker, Stanhope and Network Homes, suggests that the UK is on the brink of a large scale, commercially developed, owned and operated Build to Rent sector.
Stanhope, which recently formed an alliance with Network Homes to deliver Build to Rent homes across Greater London, approached Strutt & Parker to analyse the profile of tenant demand and the main tribes within the rental market.
Stephanie McMahon, head of research at Strutt & Parker, said: “The UK private rental market is going through a period of sustained growth, doubling in size to 5.4 million from 2001 to 2014, a trend which only looks set to continue. Some 48% of those who responded to our Urban Renters survey had been renting the same property for at least the last two years, with 24% of tenants anticipating renting as a family in the future.
“Our analysis illustrates that, although the majority may wish to own at some point, a burgeoning group of renters is making the choice for rental over ownership and enjoying the flexibility it provides. While the aspiration to own is still a key motivation for the majority of households, a preference for renting is starting to surface, with 9% of respondents in Greater London preferring to rent. We seem to be on the brink of becoming a rental nation.”
The analysis also says that there is a growing body of evidence to suggest that rental is becoming more of a lifestyle choice, rather than being caused purely by a lack of affordable housing for potential buyers.
The private rented sector has grown by 82% over the past 10 years, surpassing the social rented sector in 2012/2013 to become the second largest tenure and Halifax’s 2015 Generation Rent survey showed that between 2012 and 2015, for those aged between 20 and 45, there was a 1% decline in home ownership, a 2% decline in likely first time buyers and a 3% increase in those who don’t wish to own.