Build to rent could help solve the housing shortage

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The Royal Institute of Chartered Surveyors (RICS) has predicted that there will be a shortage of 1.8 million homes to rent by 2025. They gave two reasons for this, the shortage suitable property, and the increased tax and stamp duty charged to buy to let landlords that may stop them expanding their property portfolios.

The solution that the RICS proposes is to build more houses to rent. Many houses are being built, but not enough. The Home Building Fund has helped finance 80,855 homes to rent which have been built or currently being developed. The majority of build to rent projects have been in London. Building projects include the Olympic East Village in Stratford, Wembley Park and the proposed development of 11 high-rise blocks on the site of the old Bourbon Biscuit factory in Bermondsey. In some deprived areas, discounts of up to 25% on market value rents have been supported by the local authority. More home building is needed in the regions.

Most new build rental schemes are financed by large investors because of their high cost. Smaller investors can still contribute to creating new homes by converting small to medium sized offices to a few residential units. Alternately it is possible to purchase small plots of land to build one or two houses.

There are a number of finance options available to provide funds for build to rent projects. A commercial mortgage broker can find the best sources of lending for developers.

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