Glentree Blog

Build to Rent (BTR): The Future of the Rental Market in Real Estate

Posted on April 28, 2023 by Mikhail

Although Build to Rent is comparatively a new concept, it has been in the real estate market for a couple of years now. BTR refers to developing properties that are meant for the sole intention of renting and not for long-term ownership.

The BTR concept was introduced in 2012 as part of the Olympic Games, following which many new rentals were developed based on the idea. Many of these even have backing from the government’s Home Building Fund.

How is Build to Rent properties different?

The Build to Rent concept has been increasing in popularity as the rental market, in general, has been becoming more popular. More people may be turning towards renting due to a lack of for-sale properties that are affordable or better-quality rentals. Increasing mortgage rates may also account for the change in preference.

Responding to the requirements in the property market, more developers are opting for BTR developments to cater to the lifestyle preferences of renters.

– These homes are being designed as per modern living standards.

– Some of them even exceed expectations provided the renter can afford the rents being asked for.

– Developers are trying to develop mini-communities, including communal areas for tenants to socialise and hang out.

– Other features include gyms, lounges, game rooms, and even a concierge in some properties.

What are the benefits of Build to Rent?

In providing a new standard of living, Build to Rent properties provide many benefits for tenants:
– They are available at various price points, thus catering to budgets of all kinds of letters and renters.

– These properties and resulting communities cater to all segments of people, from a young couple looking to start a family to a senior citizen looking for a peaceful space to retire and live in.

– Buying in prime city areas is expensive. BTR is a solution for this requirement with prime locations and close proximity to grocery stores, work, tube stations, nightlife etc., in addition to gorgeous city views.

– BTR management will be keen on retaining clientele, so any issues regarding maintenance and complaints will be attended to immediately.

-These are meant for long-term income. In order to retain the long-term interest of tenants and the community, developers will sustain top-quality public spaces and commercial spaces in and around the property to attract more occupants.

Can Build to Rent properties be sold?

As it’s a new segment, there is no clarity for now if these developments can be bought and sold. If they are a means of consistent rental income for investors, rules and regulations may be put forth, considering it as a separate segment in the real estate market.

However, planning authorities should bear in mind that build-to-rent developers would want a certain level of flexibility and time to respond to market conditions. Exit clauses that aren’t favourable will impede development. Also, affordable housing shouldn’t be at risk due to the sale of BTR properties.

Renting property in the UK – weighing the pros and cons

Posted on April 19, 2023 by Mikhail

Although owning property may seem more manageable now due to the falling prices, renting scenario isn’t as promising due to the skyrocketing rents. Rents spiked by 12% last year, which amounts to £117 per month (or £1400 per year). This is more than the wage increase, which is about 6% in the past year.

Rental affordability is at the highest it has been in a decade, at 35%. It is the percentage of income that goes as rent from a person renting a property. The rental market consists of new lettings (a quarter of the market) and continuing lettings, which account for 75% of the market. These are people who decide to stay put, even though there may be changes in rent. The supply issue in the rental market is getting compounded as renters are opting to stay in current rentals and face higher rent.

Will rentals get cheaper?

The current demand and supply situation in the rental market is a cause of concern amidst rising rent rates in 2023.

– Demand has increased by 46% while supply is less by 38%.
– Rental prices have spiked.
– Potential first-time buyers are opting to continue renting due to rising mortgage rates. Hence the demand rate is worsened.
– The current pace of renting worries private renters, specifically those on a low income, as it has worsened the cost of living and related pressures.
– If the rate of rental spike continues at 12% in 2023, renters would have to spend as much as 37% of their earnings to cover rent.
– This would only be feasible for some and could affect spending power with a significant impact.
– Combined with only a slight improvement in supply, it could lead to a slump in the rental market, with growth as low as only 5% in 2023.

The only way to make renting cheaper than it is now would be to boost the rental supply, which does not seem too likely in the coming months.

Will rental supply improve?

Rental supply could improve modestly in the few months ahead. Homes that have been put on rent have increased slightly since the sales market has weakened. Those looking for the opportune moment to sell have kept their plans on hold due to the uncertainty in the sales market and have instead put their homes on the rental market.

However, rental inflation is still high due to increasing demand, thus adding to affordability concerns for renters. As a result, more renters are –

– Sharing homes to spread out the expenses and costs
– Choosing to live with parents
– Opting for smaller homes

Does the rental market look promising in 2023?

As per proposed rules and regulations, private landlords who own expensive homes are more likely to sell up due to the difficulty in managing expenses. Losses in such rented homes will impact new investments pouring into the build-to-rent properties.

The rental market will witness more demand, and it is vital to invite more supply from landlords – private individuals or corporates.

If you are interested in renting a property in the United Kingdom or searching for rental properties, please get in touch with us at Glentree Estates.

Have we swapped barmy Carney for Andrew ‘numbnuts’ Bailey in the Carry On the BoE saga?

Posted on February 3, 2023 by Trevor Abrahmsohn

After 7 years of that complete buffoon, Mark Carney, now we have Mr. Andrew ‘numbnuts’ Bailey, the present Governor of the Bank of England, in charge of our inflation. Are we in a Carry On film or are they the Keystone Cops?

Lest we forget, Mr. ‘Barmy’ Carney, made five appalling predictions on UK interest rates, inflation, and the growth of the economy.

For his idiocy, we paid him some £847,000, as the Governor of the Bank of England plus a bloated pension, and may I remind you of his soundbites.

Prediction: In August 2013, he predicted that UK interest rates would not rise until the employment rate was down to 7% which was not expected until late 2016.

Fact: It fell below 7%, less than a year later.

Prediction: In July 2015, he predicted that interest rates may have to rise during the course of the year. Note less than six months later, he said, “Now is not the right time for an interest rise.”

Prediction: In February 2016, he proclaimed that interest rates would “more likely rise than not.”

Fact: No less than 3 weeks’ later he said, “We could bring interest rates down towards zero.”

This goon made more ‘about-turns’ than Colonel Mainwaring in ‘Dad’s Army.’

Governor Andrew Bailey

Turning now to the latest hapless Governor, Andrew Bailey, in autumn last year he foolishly predicted that “the UK would in all likelihood have the longest, deepest, most damaging recession in 300 years.” This had the effect of terrifying the public, investors and institutions, and this tumult was exacerbated by the political convulsions of the Truss/‘Kamikaze’ Kwarteng debacle.

Is it any wonder that the public was ‘caught like a rabbit in the headlights?’

However, against his worst prediction, the UK economy grew in December 2022, when it was meant to be in recession and perversely, inward investment in the UK has been one of the highest in the G7.

Inflation is moving progressively downwards to a sustainable long-term predicted rate of between 2% and 4% in eighteen months’ time, as energy, transportation and commodity costs fall as we speak, as a result of the global recession.

‘Remoaners’ Out in Force

It appears that the malcontent ‘Remoaners’ are out in force again, indulging in gloomster-ville economics and rejoicing at the slightest sign of bad news that besets this country.

“Hark, where are the Brexit dividends they cry?” May I remind them that Brexit is a generational matter which is an investment in the future of this country in order to shape its destiny. Did the newly reunified Germans, bitch and moan after reunification when the magnificent west German economy was thrown into disarray for twenty-five years? No, they didn’t.

I wonder what the appeasement lobby was thinking after Churchill declared war on Germany, despite only having 300,000 dispirited troops holed up in Dunkirk, facing 3million emboldened Nazi troops who gobbled up Europe in a month? When the bombs rained down on London in 1940, the voices of disquiet must have been cacophonous and the pressure to surrender irresistible. Winston, the visionary, battled on and the rest is history. ‘Remoaners’ take note – history can repeat itself with a positive outcome.

May I remind the ‘Remoaners’ that their darling European brethren are in a worse parlous state, with rising unemployment, slow growth (Germany is in a fully-fledged recession) and instead of looking at our former EU paymasters, we should instead look west to our largest, single trading partner, the USA, which will recover faster and stronger than any other country in the G20 and where our economies are often paralleled.

The Irish protocol is all but done – bar the shouting – and I am sure that as time goes on, the idiocy of the European bureaucracy which affects our export trade, will ease as common sense prevails.

If our imports from the EU are down, this is no bad thing and will assist our trading imbalance.

Rishi and his Merry Men

Why on earth doesn’t Rishi and his Merry Men, take a sledgehammer to the much-needed reforms of red tape, so that we can at least enjoy our hard-fought freedom from the shackles of former EU protocol?

After the Second World War, Ludwig Erhard deregulated the German economy, such that the country was free of rations after six months whilst the UK was under these restrictions for a further six years and were saddled with an over-regulated economy.

Whilst no one wants the ‘wild west’ maybe there is something between this and our legacy of EU bureaucracy to help this country out of the trenches, in which we are currently bogged down.

We have the same 85% service economy as Singapore and why don’t we ape their model now that we have the freedom to do so?

Raising Corporation Tax from 21-25% is a retrograde step, and although I appreciate it does generate money for the depleted coffers of the Treasury, it does not encourage new investment in this country, which is much needed in the post Brexit era.

The EU detests Ireland’s pro-business 12% Corporation Tax, as they stagger along with their socialistically inspired 35%, anti-business rate.

Whilst Brexit may be the cathartic benefit that we all thirst for, unless we use our newly won freedoms, we will inadvertently be in the worst of all worlds.

We need boldness and courage to grasp the nettle and fly free and very soon we will be leaving our leaden-footed, former European counterparts, where they belong – in the mire.