Investment in Build-to-Rent properties remains viable, in contrast to the suggestions in various news headlines
In recent years, the rental sector in the UK has seen significant changes, with technology playing a crucial role in streamlining processes and ensuring compliance. One such example is Legal and General's Slate Yard development in Manchester, where they have invested over £3 billion into the sector [1].
The Private Rental Sector (PRS) is also evolving, with an increasing number of former rental homes moving into the sales market, according to Rightmove [2]. This shift, however, does not appear to be a mass exodus of PRS landlords, as Rightmove does not foresee long-term impacts just yet.
A deposit programme has been introduced to protect landlords' properties against potential damages or unpaid rent, while also offering tenants the option to choose a deposit alternative, potentially reducing move-in costs by £1,000 [3]. This could help renters save for a mortgage and eventually get on the property ladder.
The PRS is also targeting areas that don't necessarily offer a lot of rentals to attract more people, and there are indications that it may expand into suburbs, small towns, and villages to cater to areas with a lack of rental properties [4].
However, the future of the PRS and buy-to-let investment is somewhat uncertain, as Labour leader Keir Starmer has hinted at raising income tax to address a growing fiscal gap [5]. While no concrete direct impact is yet evident, this uncertainty about tax rises has created a ripple of concern among investors.
Starmer has not confirmed breaking previous pledges not to increase income tax, VAT, or corporation tax. Proposals explicitly targeting housing or buy-to-let related taxes have not been detailed in the information currently available [5][6][7].
In the absence of specific new regulations, the focus remains on income tax increases to improve public finances and living standards. For now, the impact on the PRS and buy-to-let market will depend on the detailed Budget announcements expected in autumn 2025 [5][6][7].
Despite the uncertainty, Marc Grundherr, a property expert, maintains that buy-to-let remains a strong investment [8]. He also believes that the PRS moving towards technology and building in areas not traditionally served could be a positive development for the industry [9].
References: 1. The Guardian 2. Rightmove 3. Legal and General 4. The Telegraph 5. BBC News 6. The Independent 7. The Financial Times 8. Estate Agent Today 9. The Telegraph
Investors are closely watching the buy-to-let market, as Labour leader Keir Starmer has suggested raising income tax to address a fiscal gap, potentially impacting investment in real-estate businesses and housing finance. On a positive note, the Private Rental Sector (PRS) is embracing technology and expanding into areas with a lack of rental properties, which property expert Marc Grundherr views as a potential positive development for the industry.
