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UK seeing influx of US-style rental homes

The number of build-to-rent homes being constructed has jumped, with 150,000 homes in planning, under construction or completed, analysis by Savills for industry trade body the British Property Federation has found

Across the UK, excluding London, there has been a 51% surge in the number of completed US-style rental homes from Q4 2018 to Q4 2019. Cities like Manchester, Birmingham Liverpool, Leeds, Glasgow and Sheffield lead the way.

Typically build-to-rent homes are apartment blocks that come with add-ons such as a hotel-style concierge and on-site management as well as shared amenity spaces such as a gym or residents’ lounge.

This type of professionalised rented housing is well established in North America, where it is known as ‘multifamily’ and has been around for decades.

Richard Jackson, co-founder and managing director of Apache Capital Partners, which has a £2bn build-to-rent development pipeline with Moda Living, said: “Given the wider investment landscape and the state of the traditional private rented sector in the UK, it’s no surprise that build-to-rent continues to attract interest from both investors and consumers.

“The under-performance of traditional investments such as sovereign bonds has encouraged institutional investors such as pension funds and insurers to look at emerging asset classes like BTR for long-term steady income streams to match their liabilities, while the poor quality of accommodation and service that many renters receive from private landlords mean a purpose-built, professionally managed offer like what we’re providing through our partnership with Moda Living is highly appealing.

“We’ve seen healthy demand at our first building to open Angel Gardens, and we see regional BTR going from strength to strength, buoyed by strong fundamentals and a renewed political focus on powering up the UK regions.”