With the ongoing demand for rental property, it was encouraging to see that during 2018 there was an increased focus on Build to Rent and institutional investment in the Private Rented Sector. This was acknowledged by the British Property Federation (BPF) who reported that the ever-increasing Build to Rent pipeline of units at the planning stage, or in construction, was in line to exceed 100,000 by the end of the year.
As we move into 2019, it is widely expected that these pipeline units will ‘hit the market’ and, with the support of institutional landlords, bring the much-needed stock to the sector and, it is hoped, satisfy the wide-ranging demands of tenants. As usual demand for apartments that are centrally located – with amenities close by – is likely to continue as is the need for single dwelling housing, perhaps near schools or local parks, for families. Added to this, however, there appears to be a growing acknowledgement that rental properties are needed for older tenants and those in the retirement sector.
A blurring of the lines between family housing – and later living – could, therefore, create a new interest in the rental sector for those semi or fully retired and who, to date, could see no transition between family housing and retirement/care living. The Centre for Ageing Better reported that, on the back of an English Housing Survey, a growing number of over 60s in the UK are renting and estimates that by 2040 a third of people aged over 60 could be living in private rental accommodation with demand for specialist retirement developments – with assured (lifetime) tenancies – potentially increasing.
For the institutional investors, therefore, it continues to be vital to understanding what tenants want – and where – and how they respond to this, whilst also, of course, considering what yields they may generate. The importance of developing strong relationships with national and regional house builders therefore remains and – even before a site is identified or planning application made – it’s crucial that an open dialogue between institutional investors and builders is maintained now and in the future.
Added to this, with the growth of institutional landlords, we are also seeing the wider use of deposit replacement schemes and PropTech playing a role in professional property management. The focus is on efficiency, performance and quality service to tenants with the ultimate aim being to help landlords retain them.
Housing has certainly been the focus of much debate during 2018 and appears to be firmly on the political agenda, but we must now wait and see what 2019 will bring and how, for the institutional landlord, and those people living in the Private Rented Sector, it directly affects them.