We are currently seeing the Private Rented Sector (PRS) scale up. It's a topic on our, and many of our clients', radars whether that's private developers, investors or housing associations.
So why has the market seen an increase in PRS activity over the last 12 months? Firstly, the demand for more housing in the UK requires an upsurge in development and with generational changes in consumer behaviour and the challenge for young people affording to buy, the "generation rent" movement appears to be one which is here to stay.
The increased need for housing in the UK was, and continues to be, an issue which developers (and councils) have at the forefront of their agenda. The government said housing was "a priority" and it had delivered 430,000 affordable homes since 2010 (BBC News). But this figure is nowhere near enough to meet the current demand.
Cities have become saturated and foreign migration isn't showing any signs of slowing down. Despite Brexit and the uncertainty in the property market, the UK (and London in particular) is still attracting people and business. The rising demand, particularly in major cities, is not being met. Supply simply can't keep up with demand. This in turn means that suburban areas are seeing a surge of interest for occupiers, as City workers look for cheaper commuting options and families are looking for places to live.
Our clients are supplying both buy-to-let and build to rent (BTR) housing schemes around the outskirts of London, in particular the South and South East where the cost to buy and rent is significantly cheaper. BTR is however a new disrupter in the market and is challenging the traditional buy-to-let room rental offered by private landlords. The distinction in this product is that the BTR schemes create communities full of amenities, public realm and a sustainable environment which is becoming more important and attractive to people than struggling to buy their own property. The challenge for institutional developers and housing associations is whether the product is affordable to the consumers and educating people on the extra benefits included in this rental cost.
At Howard Kennedy we support our clients with their ambitious objectives in the PRS and BTR to help their businesses deliver more housing across the UK. From co-living and student accommodation to senior living and affordable housing, our experience is broad. We work with private developers and investors as well as housing associations.