We are great believers in the build to rent opportunity in the UK, and see substantial potential for the growth and increased maturity of this sector in 2017.
A maturing market
- More build to rent products and data will sharpen the sector’s proposition across the U.K. With each new scheme that is completed and offered to customers, the market learns more about build to rent investment in the UK. This in turn will enable the pipeline to expand. This is a certain advantage – particularly as the initial schemes opening their doors have been well received and often outperformed rental and resident expectations
- At a local, micro-market level, more schemes could arguably discourage further development in cases where too many similar units are being provided in a small locality. However, to counterbalance this potential disadvantage, we see a proliferation in the types of schemes, specification and price points being proposed as a distinct possibility
National Housing Policy
- We see a continued imbalance between supply of new homes and demand for housing across all tenures – but particularly rental product – where demand is currently arguably most unsatisfied. This imbalance will continue to encourage investors, developers and landowners to consider build to rent development for their sites. Certainly an attractive factor for continuing investment
- Build to rent is capturing the imagination of a wider range of parties. As well as brownfield sites, we see real potential for well-located mixed use developments where build to rent units can enhance returns for commercial investors, housebuilders and commercial owner occupiers through medium and large scale upper floor / air space development. Housing policy should support this potential
Growing emphasis on differences between PRS and build to rent
- We foresee an increased awareness of differentiators between build to rent and traditional PRS rental product for customers as well as investors. In twelve months’ time the demarcation between build to rent and traditional PRS will likely be very distinct
The prospects for build to rent in 2017 are bright. Challenges remain with land supply, planning, build cost and product understanding, but the rate of progress for the sector over the last 24 to 36 months has been staggering. Build to rent does not feel like a leap of faith anymore.
Notes to editor
Lesley is one of the most well-known build to rent specialists in the residential investment market and has been heavily involved in the evolution of build to rent in the UK over the last few years.
She has contributed to thought leadership through both the British Property Federation and Urban Land Institute (ULI), having toured the US studying their multi-family model. Most recently Lesley was heavily involved with the second edition of the ULI’s ‘Build to Rent Guide’.
With 10+ years of UK PRS experience, her extensive expertise incorporates all facets of large scale residential portfolio performance including product suitability, design, lettings, management, operations and strategic asset management.
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