The one fact that unites political parties, investors, builders and tenants is that there are not enough homes in England. Plans to build 1m of them in the current parliamentary term will need to embrace all manners of schemes if this number is to be achieved, and one sector that is attracting growing attention is build-to-rent. At the moment, there are more than 60,000 units in the pipeline; that’s worth more than a third of the annual build-for-sale completions.
Several factors have increased the attractions for institutions of becoming landlords, not least of which is the paltry return offered on traditionally safe investments. The trouble is that pension funds may be very good at investing your money and keeping it safe, but they’re not very experienced when it comes to building homes. But as necessity is the mother of invention, suitable conduits are now being established that circumvent the problem.
Institutions are now working in partnership with local authorities, housing associations and even housebuilders as a means of bringing about a system whereby a pension fund can realistically look at achieving a return on its investment of 3 to 5 per cent. That’s hugely attractive, especially when considering that any investment will be a long-term commitment providing significant earnings visibility.