Choosing the type of property that guarantees the success of a business plan is essential to maximise returns for the investor. The wide variety of available housing stock will deliver many aims and objectives and attract an increasingly diverse range of consumers who opt for rental accommodation.
More people than ever are content to rent indefinitely and benefit from the resulting flexibility as the rental market in the UK edges closer to the European model. This up-and-coming trend has radically altered the mindset of many buy-to-let (BTL) investors as regards their ideal property.
Flats in town and city centres have grown in popularity as tenants have begun to prioritise the key benefits that renting provides, namely spacious interiors, flexibility and desirable amenities located close by. And, not least, such homes offer consistent returns together with respectable long-term capital appreciation for the landlord.
More importantly, as the market evolves, these so-called amenity-led developments stand to become the norm, leaving lower quality property in the shade in a competitive market. Which is why penthouses, with the premium they can deliver, are becoming fashionable.
First-class properties will always attract first-class tenants, making them an outstanding choice for inclusion in a portfolio, as they increase yield security and contribute to long-term returns. The ‘long-term’ aspect is one of the most important when focusing on return on investment (ROI) as the trajectory will naturally follow the market.
Although the concept of ‘right location, right time’ is always an important consideration, both investors and tenants are starting to favour larger, quality homes such as penthouses that have facilities located nearby.
While some landlords instinctively go for the cheaper option when buying property in order to gain value upfront, it is likely to be a false economy since a home of lower quality may not attract the best tenants for the longest periods over the long term.
Penthouses make particularly successful investments because they often have amenities that differentiate them from the run-of-the-mill, whether a spacious interior or attractive external areas, especially in locations lacking outdoor space.
Another reason why this type of home is becoming increasingly popular is because ever greater numbers of employees are choosing to relocate to prime town and city centres.
The growth of the ‘transient tenant’ is a crucial pointer for investing in quality, with almost 50% of UK professionals saying they would be willing to relocate for work and 38% saying they would move for better employment opportunities.
Tenant demand in a competitive market
This burgeoning transient population is a significant indicator of potential for a town such as Bracknell, the heart of the UK tech industry, which offers some of the best career opportunities in the country. Rental demand for quality accommodation is on the rise, underpinned by forecasts that the town’s population is expected to increase by 17% to 141,000 by 2039.
The Grand Exchange in Bracknell, built to the highest standards and comprising the amenities desired by the modern tenant, is the foremost example of a premier development. The penthouses, the crowning glory of the scheme, have been designed to offer the last word in luxury in the heart of Bracknell.
The Grand Exchange, part of a £770 million regeneration plan and due for completion in 2022, more than meets a genuine need for quality residential accommodation that will enable direct access to jobs in Bracknell and effortless commuting to London and Reading.