Property managers vital for expanding PRS modelThere is no doubt that build-to-rent (BTR) is flavour of the month among investors both in the UK and internationally. We are seeing billions of pounds pile into the sector from all manner of investors including pension funds, property funds and high-net-worth individuals.
According to the British Property Federation, the UK currently has 95,918 BTR homes either complete, under construction or in planning.
Compared with 69,824 in the first quarter of this year, this represents an increase of 37.4% in the number of new high-quality rented homes across the country.
It is no coincidence that the boom in development has coincided with a change in attitude towards renting as an acceptable form of tenure. The stigma that had been associated with renting, which had developed over decades as successive governments promoted the ideal of home ownership, has now evaporated.
Last year, PRS occupancy increased by 40%, while home ownership increased by 2%. Now worth an estimated £1trn, the UK’s residential rental sector is larger than the entire commercial real estate market (£871bn) – and less than 2% of it is owned by mainstream institutional investors.
However, with the private rented sector (PRS) doubling over the past decade, institutional investors are cottoning on to its potential as a reliable long-term income stream and are increasingly planning to grow their exposure to it. Institutional investment in BTR is expected to grow from £25bn this year to £100bn in 2022. But in all the haste to get buildings up and occupied, is enough attention being paid to the operational model?
Read the full article in Property Week