Property consultancy CBRE claims that Build To Rent is likely to be the most resilient sector of the UK property industry in the coming years - and this is despite a downturn in 2020.
CBRE has tracked investment into BTR since the sector emerged in 2015.
After a strong start to the year, with over £1 billion of investment in new projects in the first quarter of this year, it has joined all other sectors of the property industry in seeing a major downturn in the second quarter.
Even so, CBRE says some schemes are moving forward.
These include a £125m scheme in Birmingham from Court Collaboration, and a 440-apartment project - again in Birmingham - from Taylor Grange. Amro Real Estate also has plans for 278 homes at Ealing in west London.
The consultancy says there is a substantial investment pipeline with just over £1.4bn worth of deals currently under offer. This is broadly equivalent to the investment pipeline at the end of 2019, which then translated into £1 billion of investment in Q1 2020.
Scott Cabot, CBRE’s associate director of research, says: “It’s little surprise that there was a sharp downturn in investment in Q2, as the lockdown halted activity. But this period has also highlighted the resilience of the … sector. Rent collection rates have remained high, and historically rents have declined less and recovered quicker during downturns, giving investors some confidence to proceed.
“With £1.4bn of deals currently under offer, we anticipate a rebound in … investment in the second half of 2020, and a return to growth in 2021.
“While we may see modest rent falls in 2020, we expect the sector to return to growth in 2021 and outperform other sectors.”
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Of course it's tipped for success! It's been Gov.Uk strategy for years. Regulate the industry, remove the private landlord in favour of corporate business.
Mr White is entirely correct. Pension funds are aiming at residential investment on a build-to-rent basis, their advisers reportedly have the ear of Messrs Sunak and Javed and are believed to be offering housing shortage solutions at little or no cost to the government so of course government is supportive. If you look at government policies over recent years in terms of creating a market for build-to-rent products by eliminating the competition in the private sector, the several policy moves by government start to make sense and no amount of complaining by private landlords will make any difference. Uneconomic lettting properties then made available for sale to any buyer who can afford one expands availablity in that sector too, so for HMG, it's win-win.
No proper LL objects to fair competition.
That is the game we are in
BUT the Govt has made the PRS distinctly unfair for the small LL compared to Corporate LL.
A 'level playing field' in the PRS we certainly DON'T have!!
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