5 February 2021

Insights into Build to Rent

On our latest More Than Law podcast, host Miri Stickland is joined by three members of our Build to Rent group who provide their insights into the sector.

Commercial Real Estate Partner Helen Streeton talks through the types of sites being acquired for BTR schemes, who the key players are as the project progresses and how the funding risk profile differs on a BTR development scheme. Partner Elizabeth Small from our Tax team discusses the importance of focusing on tax structuring at the outset of a BTR development and the potential longer term tax implications when the scheme is operational and Matt Evans, Counsel in our Planning team, walks us through the planning complexities of BTR schemes, including delivery of affordable housing.

“The market for BTR is ever-expanding and not a day goes by in the property press without hearing about further entrants into the market to forward fund a development or acquire a stabilised scheme. When we are looking at site assembly right at the beginning of the process, the key question is what scheme is the developer looking to build, which will often involve tall towers. The developer will be looking at various issues including the footprint of the site, potential rights to lights issues and the extent of the existing infrastructure in place, with the end users likely to be young professionals to whom transport connections are going to be important.”

“With a BTR scheme there are often tight margins which means it is very important to manage the cashflow. This involves making certain that one considers the amount of VAT payable upfront, if any, and the SDLT cost as well. A BTR development can start off with, for example, either a bare site or an existing office block needing redeveloping or perhaps demolishing. It’s going to be critical to understand the different VAT and SDLT costs which attract to those different sites.”

“Private rentals have always provided a significant part of housing in this country but it is only more recently that it has been given a definition and designation within the planning regime and started contributing significantly not only to housing delivery but also capturing affordable housing as part of that provision. Planning authorities will seek to secure that private rental use for an extended period to prevent those units being sold outright, usually via section 106 obligations.”

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In this episode we were joined by:

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