What is ‘Build-to-Let’?

05th January 2018 at 10:46

What is ‘Build-to-Let’ & how will it affect North Northumberland?

The rise of renting over the last 20 years has fundamentally changed the way we think about home ownership. While that’s the case for residents, it’s also the case for the property industry. As renting changed from being a stop-gap to a mature long term tenure option; government, investors and housebuilders created ‘build-to-let’ (BTL), but what is it and what does it mean for landlords in North Northumberland?


BTL is a type of residential development where the units are built specifically to be rented out, rather than sold to owner occupiers and investors (i.e. private landlords). The building(s) are run by a professional management team and marketed centrally. The marketing team will have a decent budget and will be aiming to develop a brand which attracts young people.

The aim is to build 150,000 homes for up to 350,000 people and will cost around £30 billion to complete. It is hoped that build to rent will not only go a long way to helping with the housing crisis in the UK, but will also improve the quality of homes tenants are living in. London is the most prominent city for build to rent properties, with more than 30,000 homes set to launch in the capital soon. But there are plans to roll out the scheme across the rest of the UK with the aim of providing tenants more security than they may get with private landlords.

The main implication for landlords in NORTH NORTHUMBERLAND (NE65,NE61,NE66) is that they might face more competition in the future. There is currently a pool of 13,210 private rented household that the sector is competing over. If BTR takes off, and they choose to focus their marketing on the benefits of having a company rather than an individual as a landlord, this could negatively impact private landlords.

Build-to-let does have a lot to commend it, we don’t see the role of private landlords diminishing any time soon. Private landlords are often more than happy to have tenants for extended periods of time, and many use professional management companies to take care of any issues that may arise, so it’s unlikely that tenants will perceive a big difference.

However, build-to-rent is very much in its infancy. It is far from proven that it will generate sufficient returns for the institutional investors which back it. Even if landlords do find themselves having to compete with BTR schemes, a well maintained and well priced property will always be in high demand. If you want to know more about investment opportunities, please give us a call.

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