Build-to-rent schemes are all the rage and almost all of them are amenity-rich apartment blocks in city centres.
London is a hotspot but there are schemes under way in most major cities, including Leeds. Property agency JLL says that the build-to-rent market in Leeds is one of the most active in the country with demand fuelled by young professionals and affluent students.
The first large-scale build-to-rent development in the city was the Clarendon Quarter and has just over 300 apartments. There are another 3,500 build-to-rent properties in the development pipeline.
Just under 1,000 apartments are under construction and include Dandara’s 744 flats at Sweet Street West and Grainger’s 242 apartments on the site of the former Yorkshire Post building. Work on the 515 flats in Moda’s SOYO scheme at Quarry Hill is about to begin and Get Living hopes to start work on 756 homes on Globe Road next year.
While rents in such schemes can be up to 20 per cent higher than average, they come with longer tenancies and many boast impressive communal facilities.
The government believes they will help the housing shortage. Others have concerns over the bandwagon and there are fears that viability may be compromised if Labour wins an election and imposes a cap on rents.
Jonathan Morgan, of Leeds-based Morgans City Living, also adds a note of caution: “The proportion of the housing market accounted for by rentals has increased significantly over the last ten years as mortgage availability has been squeezed amid rising prices. But with real pressure to build more affordable homes, it’s not beyond the realms of possibility that rental demand could fall over the next decade.
“It’s a fluid market and build-to-rent operators will need to ensure that they stay firmly in touch with changing trends.”
Family-owned Pickard Properties, which has just completed the first phase of an innovative £40m rental village, had no need to do its homework. It has been immersed in the Leeds lettings sector for almost 50 years and owns a substantial portfolio of student, professional and commercial rental properties.
Spinning Acres is Pickard’s own take on build to rent. On a six-acre site in the Far Headingley Conservation Area, three miles from Leeds city centre, the plan is to create a mixed community.
Set around a village green, there are 13 townhouses and two detached properties. Rents start at £1,800 per month.
The second phase, which is under construction, is an apartment building with 31 homes and will be followed by the conversion of an existing house into flats and more new-builds, which could include an over-65s development.
“The idea is that there will a mix of people from young professionals and families to older people,” says Miles Pickard.
The decision to let was made after Pickards noticed a trend towards renting as a lifestyle choice. “We are seeing a slow drift away from the urgency to buy. Affordability is an issue but young people also like rent because it gives them flexibility to move around and they want to spend their money on other things rather than saving for a deposit on a house.
“The other factor is that the younger generation don’t want to compromise on area. They are less likely to buy in a less desirable place with a view to trading up one day when they can rent in a more affluent are that offers the lifestyle they want
Family-size properties were added because Pickards noticed a shortage of quality lets for that market. “There are always people with families who relocate for work and renting is an option until they decide whether they want to buy and some may never buy at all. Renting used to be seen as needs must but now it is becoming a conscious decision,” says Mr Pickard.
“There are no maintenance worries and people can spend their money on other things. In a build to rent development like ours you could stay for life, starting in a flat, moving to a family home and then downsizing to an over 65s property.”