Commuter belt build-to-rent sees largest rental premium over buy-to-let

Rents in commuter belt build-to-rent flats achieved the highest premium over the local buy-to-let market in 2019, according to new research from Colliers International. It found BTR rents in Bedford, Stevenage, Basildon, Crawley, Maidenhead and Bracknell were 9.4% higher than buy-to-let rents. This compares with an overall BTR premium of 9% across 132 schemes in 25 cities, in some 20,000 flats. BTR rents in the North were 9.1% higher than buy-to-let rents, with an 8.9% premium in London, 8.5% in the South and 8.3% in the Midlands. The report showed a small decline on previous years’ surveys, with one-bedroom flats achieving a 9.1% premium, compared with 9.9% the previous year, and two-bedroom flats at 8.8%, compared with 9.4%. Schemes that provided a concierge, gym and lounge had rents that were 9.9% above the local market. Those that did not provide any of these amenities were just 7.7% higher. Toby Nicholson, head of build to rent at Colliers International, said: “The fact that there is a premium across the country is positive; it means it is not just London-centric.” He added that premiums in locations such as the commuter belt were reflective of the stronger economy driving a deeper market, supporting a range of BTR homes where clients are willing to pay a premium for a premium product. Nicholson said: “It shows if you design decent buildings and put a good service in place, tenants will choose to live there – and long-term BTR investors, such as pension funds, will be rewarded with a greater rent roll and that has huge implications on the total return of a fund.” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette