European law firm Fieldfisher has received an increasing number of inquiries from clients in the UK's Build to Rent (BTR) market about how new rules governing the private rental sector (PRS) will affect the development of the industry.
BTR, which is purpose-built housing designated entirely for renting, is the most contemporary trend in UK residential real estate.
As with any fast-developing sector, bottlenecks have emerged in the BTR market as not all parts of the real estate, construction, planning and legal industries have evolved at the same pace – creating potential conflicts between different stakeholders and some confusion over how the market operates.
According to the British Property Federation (BPF), there were 139,508 BTR units at various stages of development across the UK at the end of 2018, up 22% on the year before.
This is generating huge opportunities for public and private sector stakeholders and offers significantly more choice for tenants, but all groups interested in BTR are calling for guidance on how to access the trend.
The main issues clients are seeking advice on include: challenges in construction and delivery, especially in the wake of the Grenfell tragedy; changes to landlord and tenant regulations; the speed of the planning process; land prices; tax treatment of the asset class; competition from the Buy to Sell sector; and misunderstandings around affordable housing.
Commenting on the recent upheavals in the industry and corresponding uptick in client inquiries, Rhodri Pazzi-Axworthy, real estate partner at Fieldfisher, said:
"The emergence of Build to Rent as an asset class has been one of the biggest changes to hit the UK residential real estate market in the last decade.
"Having advised on some of the earliest BTR projects to be developed in the UK and with several client projects currently underway, we have seen how this sector has driven fundamental shifts in the way housing schemes are financed, planned, built and operated.
"We expect BTR to continue to generate opportunities for various key stakeholders, but ongoing revisions to the regulatory frameworks governing this industry will throw up further challenges to test the market."
Fieldfisher will be publishing its latest guidance paper on this topic: "Build to Rent: Accessing the Trend", on Thursday 20 June. To download a copy of the paper, please click here.
About Fieldfisher
Fieldfisher is a European law firm with market leading practices in many of the world's most dynamic sectors. We are an exciting, forward-thinking organisation with a particular focus on real estate, energy & natural resources, technology, finance & financial services, life sciences and media.
Our construction and real estate teams provide a full range of legal services to assist clients in delivering projects in the most timely and cost-effective manner. We provide practical solutions through our thorough understanding of the commercial pressures facing the construction and real estate industries and our clients.
Our network has more than 1,550 people working across 25 offices providing highly commercial advice based on an in-depth understanding of our clients' needs.
We operate across our offices in Amsterdam, Barcelona, Beijing, Belfast, Birmingham, Bologna, Brussels, Dublin, Düsseldorf, Frankfurt, Guangzhou, Hamburg, London, Luxembourg, Madrid, Manchester, Milan, Munich, Paris, Rome, Shanghai, Turin, Venice and Silicon Valley.
Fieldfisher was named as a top 20 firm by the FT Innovative Lawyers Awards 2018.