US pension fund money backs UK build-to-let plans

A developer backed by American pension fund money has entered the UK’s build-to-let market.

Essential Living has over £200m of US cash behind it, via London-based M3 Capital Partners.

The business strategy is to deliver 5,000 units of private rental stock, all new homes, over the next decade across London and the South-East.

The build-to-let concept was aired last summer in the Montague Report, which proposed that institutional funding be attracted into the sector, and that local planners should accept build-to-rent as an alternative to affordable homes. The Government was quick to snap up the recommendations, although as yet there has been no planning advice.

Essential Living, incorporated only last year and which sets out its stall as finding and procuring land, sorting out planning permissions, developing sites and then managing the rental properties, claims to be the first structure of scale in this new market.

While the concept is new in the UK, Essential Living says it will utilise its experience of investment in the ‘multifamily’ sector – the US equivalent of build-to-let.