Build-to-rent developments vs mixed schemes in Manchester
Greater Manchester is seeing a property boom in the construction and take-up of property developments, especially build-to-rent schemes. Build-to-rent developments involve full apartment blocks being built strictly for the rental market. Not available to owner-occupiers or small private landlords.
Many of the large build-to-rent schemes in Manchester and Salford have been bought by institutional investors and pension funds. These schemes are often too wrapped up in having a high profit margin. Institutional investors are naturally in it to make money, and the pension funds use these schemes for alternative sources of income.
Demand for owner occupied units, not just rental properties, is also increasing in Manchester. This is especially the case in the city centre, where the population is expected to increase by 100,000 by 2025. Because of this, mixed schemes can help provide a range of housing to people living in and moving to Manchester.
The downfall of institutional investors and pension funds purchasing developments
With institutional investors and pension funds purchasing build-to-rent schemes in Greater Manchester, the top priority for these developments is making money. The focus is no longer on having quality spaces for residents.
For example, Legal & General recently purchased the Northern Tower of Deansgate Square through its UK Property Fund and Managed Fund. The financial services company has been buying build-to-rent developments across the UK and hopes to receive strong rental profits from this tower of 276 apartments.
Dandara, a company who delivers build-to-rent developments all over England, has sold three of its residential developments to the German institutional investor, ECE. A 995-unit scheme in Chapel Wharf was included in the deal.
These kinds of investments and developments in Manchester don’t stop there. Moda Living and Apache Capital have a joint venture to develop and deliver a build-to-rent portfolio across the UK, including Angels Gardens located in Manchester. Moda Living is the largest privately funded build-to-rent platform in the UK and attracts investment from institutional investors.
Residents now expecting more from their property development
Residential schemes coming forward in Manchester need to provide community spaces and amenities that benefit residents’ lives. It shouldn’t just be about profit margins but creating spaces that people enjoy living in.
Especially in times of COVID-19, we need to put more investment into the places we live, create quality spaces that offer useful amenities and make residents feel at home. And it’s important to keep in mind that city centre living isn’t only about renting.
There are many homebuyers wanting to purchase in the city but are left with few options as rentals are taking over the market. Developments with a mix of rentals and owner-occupied units allow for a balance. And often these developments focus more on liveability as people are likely to stay put for longer that way, creating a solid community.
The benefits of local property developers
Salboy is a local property development company in Manchester and Salford. Our developments are home to a balanced mix of investors and owner-occupiers, blending rentals with sales. Because of this, we don’t need to hold onto assets as an institutional landlord or sell to super landlords.
Fred Done and Simon Ismail, co-founders of Salboy, were both born and bred in Salford, so they are able to draw on local knowledge to build developments and properties people want locally. It’s not about just making a quick turnover. We live and work here too and want all of our builds to be something we are proud of.
With an emphasis on lifestyle, quality of amenity is a big part of Salboy’s developments with gyms, swimming pools, laundrettes, and cafes and coffee shops on offer, and there is even a sports pitch on the roof at LOCAL Crescent.
Salboy is focusing on building homes residents can build their life around. The local property developers have completed 1,300 apartments and 17 townhouses around Manchester and Salford. And over 1,000 apartments and 12 houses are currently onsite.
If you are interested in buying a new-build property as an owner occupier in Greater Manchester, check out the property developments we are proud to have delivered. Please contact us for more information.