RENTERS may be interested to hear about a new scheme that's on the rise, called build-to-rent.
These purpose built new developments have one single landlord and the Government says they should offer tenants the choice to stay for three years or more.
Renters will also be given the right to leave with just one month's notice, without a break fee, after the first six months.
In addition, the Government says around 20 per cent of these new developments should be affordable housing.
This all sounds good in theory and it seems this new style of renting is on the rise.
Build-to-rent is on the rise
According to data from estate agent Savills, at the start of this year there were 14,600 completed build-to-rent homes across the UK, excluding London, and a further 14,800 in London.
How to haggle with your landlord and bring down your rent
WHEN you first sign your tenancy agreement with your landlord your rent should be agreed either in writing or verbally.
To increase your rent your landlord must send you a section 13 notice which gives you a month's notice in writing telling you how much your rent will be increased by and the date when your rent will go up.
At this stage you should try to talk to your landlord and come to a fair agreement on how much rent you should pay.
Your landlord can only raise your rent if you agree to the increased price.
Matt Hutchinson, communications director for flatsharing website SpareRoom.com said that if you are a good tenant then you've got bargaining power.
"The first thing to bear in mind is that demand is lower at the moment than over the past couple of years.
"That means you’ve got a bit more bargaining power, especially if you’ve been a good tenant, as your landlord won’t want the expense and hassle of having to find another tenant and even potentially face a period with the property empty.
"Failing that, it’s worth seeing if you can get anything thrown in with a rent increase, such as minor bits of redecorating or any bills."
Landbay have a free rent check service to see how much rent you should be paying in your area.
You can find the rent check service here.
Find out more about how to haggle with your landlord to bring your rent down here.
Meanwhile, the total number of new buy-to-rent properties completed, under construction, or in the longer term planning pipeline stood at 139,500 in the last three months of 2018.
That's up 22 per cent compared to the same period in 2017.
One such development is Wembley Park in north London, which is managed by Tipi.
The first flats opened in 2016 with 550 now filled. But a total of 7,500 are planned to be built on the site by 2027 – one third of which will be affordable.
What makes these properties appealing is their high spec finish, up to three-year tenancies, the fact there's no deposit, and on-site extras, such as the gym are included in the fee.
Utility bills are also included in the price making budgeting easier, although this does mean you can't switch to a cheaper provider.
Some flats are furnished as Tipi has a deal with John Lewis – although this will cost you more – while others are unfurnished.
But is build to rent a good deal?
Whether build-to-rent is a good deal depends entirely on the price you're being given, what you get for it, and whether you qualify for affordable housing.
The Wembley Park development doesn't come cheap – it says the average renter will need a salary of £40,000 to snap up a flat, and rental prices start from the following:
- £1,450 a month for a studio measuring 39 square meters – that's £510 a month more than the average monthly rent of £940 for a similar property in the area, according to property portal Zoopla.
- £1,590 for a one-bedroom flat covering 52 square meters – that's £353 more than the average £1,237 for a similar property in the area
- £1,900 for two-bedroom covering 68 square meters – that's £312 more than the average £1,588 for a similar property in the area
- £2,641 for a three bed covering 90 square meters – that's £608 more than the average £2,033 for a similar property in the area
There are also added fees if you have pets. So, a cat means an additional charge of £30 a month or £50 a month if you have two. While dogs will incur a £50 a month fee.
When you leave, you'll still have to pay up for any damage caused beyond the usual wear and tear. But Tipi says there are no other fees involved.
Of course, what you need to bear in mind is that Tipi's prices include utility bills and Tipi's properties are new, whereas Zoopla will cover all property types and some listings will include bills in the price while others won't.
So if you're a high energy, water or broadband user you may find you make back the higher costs through bill savings.
But it's not just London where these properties are being built. Other large developments are planned by other companies in Leeds, Birmingham, Manchester and Liverpool, according to Savills.
'It's simple and easy… as long as you can afford it'
Independent property expert Henry Pryor says build-to-rent offers an interesting solution to the housing crisis but warns that it won't come without problems.
He said: "Build-to-rent is part of the solution to the housing crisis but it is not 'the’ solution.
"It has much going for it, it can be financed by the private sector, can be rapidly deployed, it is flexible and will provide homes for people struggling to find something affordable.
"The idea may not be what their parents had aspired to or indeed may have hoped for their kids but it’s easy and simple so long as you can afford it.
"It’s not home ownership and it offers little prospect of home ownership to those tenants who take up the offer.
"But we have accepted this as a principle when it comes to buying cars – these days we rarely own a car, we just look at the monthly payments and change it every three years. Perhaps we will do the same with our homes?
"Expect to see more of this in the months to come but be wary, we will also see stories that don’t have a happy ending perhaps. Where there is profit there will be folk who take advantage."
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But landlords have already started hiking rents by 7 per cent a year ahead of June’s ban on tenant fees.
Here's how to haggle with letting agents or landlords BEFORE the fees ban comes in.
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