Build-to-let is one of the latest buzzwords being used in property circles. This is because there is a strong surge in UK property investors putting money into projects aimed specifically at the rental market. At the moment the build-to-let market is relatively small, with only 14,000 of the 27 million properties in the UK falling into this sector. However, all that is set to change because of the huge demand from tenants.
According to Knight Frank, the build-to-let market has currently seen £15 billion of investment and this is forecast to grow to £50 billion by 2020 as more properties are developed to meet the tenant demand.
Knight Frank describes a ‘structural shift’ that is currently taking place in the UK, especially among young people. The traditional desire to own a home is not as prevalent as it used to be simply because there are large cross-sections of young people who can’t afford to get on the property ladder as well as young professionals who enjoy the flexibility and convenience that renting gives them.
The growth in city centre living is testament to a fundament shift in attitudes as young professionals live, work and play in the cities and avoid tying themselves into mortgages. It is predicted that most of the build-to-let investments will take place in the big cities and whilst London is sure to be popular, investment hotspots such as Birmingham, Manchester and Leeds are likely to see a surge in build-to-let developments as well.
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