Enness has recently spoken at length about financing the emerging build to rent market in the UK. Build to rent can be a lucrative investment for property developers, but it’s also one that fills an essential gap in the UK market. For millions of people in the UK, saving enough money for a deposit simply isn’t a feasible option. But even if they can’t purchase a property, families and many other groups of tenants still desire the stability of knowing exactly where they’ll be living and how much they’ll be paying for it.
The government recently published a housing white paper, which set out a series of aims to promote security for tenants. One of these aims was to start providing three year tenancies, offering renters the long term stability that they often crave but are unable to secure. This week, the British Property Federation (BFP) promised to endeavor to provide this security with its new build to rent developments. They pledged:
“One of the benefits of the UK’s new build to rent sector is its ability to offer longer tenancies to its customers. We, the undersigned, therefore pledge to offer our customers the option of a three-year tenancy in any of our new build to rent buildings. Our customers will not be under any compulsion to take up this three-year tenancy option, and can still opt for shorter terms. To further assist customers with their budgeting, we pledge to review rents no more frequently than once a year or at the end of the initial term, and to set out clearly at the start of the tenancy the basis on which rents will be reviewed. Such tenancies will allow the tenant to break, after a short period of notice.”
This is an important point to consider for any potential developers looking at entering the build to rent market. Your project’s success will depend on several factors, from location to the quality and finish of the homes produced. But securing happy tenants is also important. Providing security for your tenant’s will in turn mean you have a steady rental income from your property.
If you’re looking for advice on development finance for the build to rent market, contact Enness today for a further discussion.