Finding the right sort of property to rent can be a bewlidering time for many when faced with the choice of buy-to-let or build-to-rent or some other jargon-filled combination.
However new research suggests the build-to-rent market will emerge victor and soon account for a third of the private rental market.
But many believe the government’s encouragement of iinvestment away from the buy-to-let sector and into the build-to-rent sector will be costly for those who want to rent.
Leading room share platform, ideal flatmate, looked at the cost of renting a room in all of their build-to-rent developments and then compared this to the average cost of renting in the wider buy-to-let market
The website has the exclusive listing rights for all UK build-to-rent properties, matching groups of tenants who show interest in a given development and then providing them to each developer once a flat is fully let.
Its research found that the vast majority of build-to-rent developers offered a wealth of additional benefits included in the price such as gym use, amenities, wifi and even parking.
So ideal flatmate also looked at the cost of these extras on top of the average rent for the wider area to give a more like for like comparison on build-to-rent value for money.
The study shows that on average, the cost of renting a room in a build-to-rent development is just 15% higher than the cost of renting in the buy-to-let market – £868 on average compared to £752.
However, there are a total of seven areas across the UK where build-to-rent offers even better value than the wider market.
JLL’s development in Queen Street in Leicester has a rental cost of just £405 a month, 33% cheaper than the room rental average and cost of amenities in Leicester (£605).
Their development in Greenwich is also 18% cheaper than the wider cost of renting and amenities in the borough at £717 a month.
Urbanbubble’s development in Liverpool costs just £500 a month compared to the average of £575 for a room and amenities elsewhere in the city – a 13% difference.
Allsop’s Forth Banks development in Newcastle is also 13% cheaper at a cost of £500 a month with renting a room and bills across the city as a whole totalling £591.
LIV Group in Bath and JLL’s Harrow development are also 6% and 5% better value than the wider area respectively.
In Manchester there is almost no difference in value between the average build-to-rent cost between LIV Group and Way of Life’s developments and the city average, coming in £2 cheaper on average.
The highest build-to-rent premium is in Tower Hamlets where the average cost of a room in a development is 44% higher than the borough average.
Lewisham is the home to the next highest rental premium at 35%, with Salford build-to-rent costing 14% more on average.
Co-founder of ideal flatmate, Tom Gatzen, commented: “Build-to-rent has come under scrutiny due to the higher rental costs but when you consider the additional benefits there is a very strong argument that these developments provide much better value for money.
“For a start, they are new builds so the quality is very good and they have a much more professional management structure in place to support tenants when compared to the traditional communication chain of the tenant, letting agent and landlord.
“They also offer a lot more for your money in terms of amenities included in the price, with many providing wifi, bills and a gym as standard.
“This comes on top of other benefits such as parking and private gardens and while you pay more as a lump rental sum for these benefits, the convenience of paying for everything in one go is something that appeals massively to today’s generation of tenants.”
By Amardeep Bassey
Source: Kent Live