House builders and developers look to the rental sector

A trend of 'let to not sell' rather than ‘buy-to-let’

Developers will start to build properties to rent rather than sell if the housing market continues to lag, predicts Savills. Yolande Barnes, head of residential research at Savills, says that house builders and developers will look to the rental sector as sales fall and mortgage finance continues to be rationed.

Currently the rental sector accounts for about half of all household moves, and the supply of private rental housing is still increasing. This could mean that we start to see a future trend of 'let to not sell,' rather than 'buy-to-let. '

Speaking at the launch of industry trade body publication UK Housing Review, Ms Barnes said, "We are seeing rental demand increasing and although there are some issues with oversupply, it is true to say that renting is the new selling. The space to watch is build-to-let."

The National Landlords Association (NLA) has some concerns about builders focussing on the rental sector. A spokesman for the NLA commented that if developers are going to build-to-let they will be entering a crowded marketplace and you also have to ask what happens when house prices go up again, will developers abandon their short-term rental business models? And what happens to tenants when developers eventually decide to sell up?

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