Unpacking investment opportunities in Build to Rent hotspots

Global Residential’s Greg Stockton discusses how to navigate a competitive Build to Rent market landscape in 2024.

Leeds city centre | Global Residential | BTR News
Leeds city centre. Image credit: UK Investment Property.

In the realm of UK property investment, the prominence of Build to Rent schemes is reshaping traditional market growth, particularly in vibrant city centres in places like Leeds.

By Greg Stockton, Global Head of Sales and Distribution, Global Residential

Having spent time there viewing the site of our upcoming project and meeting the developer, its clear to see the presence of Build to Rent and after speaking to local agents it was good to get an understanding of why there’s not a huge amount of quality stock for sale on the market.

With the rise of purpose-built rental developments, investors encounter a unique challenge – heightened competition for investment properties. However, counterintuitively, this challenge can present lucrative opportunities for astute investors willing to capitalise on the enduring value of Build to Rent hotspots.

Understanding the investment landscape

In areas boasting a significant presence of Build to Rent schemes such as Leeds, securing investment properties can prove challenging due to heightened demand and limited availability. The appeal of these developments, with their potential modern amenities, higher efficiency ratings, flexible rent options, and strategic locations, attracts a diverse array of renters, including young and established professionals as well as students.

Identifying investment value in Build to Rent hotspots

Understanding of the scarcity of available investment properties in Build to Rent hotspots underscores their attractiveness to investors. If looking to invest in markets that are not saturated with investment properties, opportunities to own assets within Build to Rent dominated areas present a compelling proposition for long-term wealth accumulation.

The significance of developer confidence

The decision by owners (often banks and pension funds) and developers of Build to Rent schemes to retain ownership and operate properties as rentals reflects a profound belief in the long-term value of these assets and the city they sit in. Rather than pursuing immediate profits through sales, they focus on rental income and asset appreciation, signalling confidence in the sustainability and growth potential of the Build to Rent hotspots.

Capitalising on developer vision

Investors who acquire properties within Build to Rent hotspots align themselves with the strategic vision of experienced developers and owners. By recognising the alluring value of these assets and their integral role in shaping urban landscapes, investors position themselves to benefit from the continued growth and appreciation of Build to Rent dominated cities.

New launch - The One Residences - coming soon | Global Residential | BTR News
New launch – The One Residences – coming soon.

Leveraging stability and growth potential

Build to Rent hotspots offer investors a unique blend of stability and growth potential. The presence of purpose-built rental developments stabilises rental markets, mitigating the risk of vacancy and income fluctuations. Simultaneously, these developments contribute to the revitalisation and transformation of cities and the urban neighbourhoods, driving appreciation in property values over the long term.

Embracing opportunity in competitive markets

In the face of intensifying competition for investment properties, investors can find solace in the opportunities presented by Build to Rent hotspots. By recognising the inherent value and resilience of these developments, investors can navigate the complexities of the property market with confidence, securing assets poised for enduring growth and prosperity. In cities like Leeds, where schemes thrive, seizing opportunities to own within these dynamic cities can prove to be a prudent and rewarding investment strategy.