13th
Feb 2014
All major cities may be considered for many billions of pounds worth of build-to-rent multi-blocks, so says a new report.
Pensions funds and institutional investors are looking to jump on the bandwagon of the private rented sector as one in six people rent their homes and are expecting high returns from the market.
Industry heads all believe that the government scheme needs to be extended quickly to keep up with demand.
One world-wide property firm and consultancy is at present handling rent block deals of over £1 billion in six major cities of Birmingham, Bristol, Glasgow, Leeds, London and Manchester and the report tracks the performance of the cities' rental blocks.
The firm says that private rental is continuing its' sharp rise which is encouraging institutional investors to jump into the market with major investments.
James Mannix, head of Residential Capital Markets, said: “Picking the correct location and the type of units built are two factors critical to ensuring the best returns; pricing of rents is also key.
"Branding should also be in the equation: similar to the hotel sector, we believe there is an opportunity for rental developers to create brands recognisable to a consumer audience.”
Last year the six cities that the firm tracked reported that they had an average yield of 6.6%.
There was also a fall in the average discount from 20 per cent to just 10, showing increased activity in those areas.
Grainne Gilmore, head of UK Residential Research and the report’s author, said: “The rental revolution is here. The dynamics in the housing market in the UK mean that the private rented sector is set to continue growing in the years to come, boosted not only by the difficulties many face in climbing onto the housing ladder, but also the need for flexible tenure among workers who are increasingly concentrated in the key cities around the UK.”
A “fair deal” to be introduced for rented sector and £11 billion investment.
16th Feb 2014
Housing Minister Kris Hopkins has recently hosted a summit at 10 Downing Street which was attended by the leading lenders who provide private landlords with buy-to-let mortgages.
The Intention is to set up a new partnership between the government and the lenders to give landlords and tenants a “fair deal” in the private sector.
The government is determined to strengthen the private sector and the lenders have agreed to work alongside to banish the barriers stopping tenants to be given longer, “family-friendly” tenancies.
The government besides investing £1 billion in the Build to Rent fund has also issued guarantees of a further £10 billion to build new homes specifically for private rent.
Mr Hopkins said: “With 3.8 million households renting in the private rented sector, I want to be sure we take every step to give them the confidence to rent knowing they’ll get a fair deal.
“I’m really pleased that leading lenders have agreed to work with us to see how we can tackle the barriers that prevent people from getting the deal they want.”
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