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Savills: UK sees influx of Build to Rent homes

The UK is seeing an influx of American-style purpose-built professionally managed rental homes, with the number of homes designed and built specifically for rent having grown massively in the last year.

Analysis by Savills for industry trade body the British Property Federation (BPF) has found the number of Build to Rent (BTR) homes has increased, with 150,000 BTR homes in planning, under construction or completed.

There has been a 51% surge in the number of completed US-style rental homes in key regional cities, with Manchester, Birmingham Liverpool, Leeds, Glasgow and Sheffield leading the way.

Richard Jackson, co-founder and managing director of Apache Capital Partners, which has a £2bn BTR development pipeline with Moda Living, said: “Given the wider investment landscape and the state of the traditional private rented sector in the UK, it’s no surprise that Build to Rent continues to attract interest from both investors and consumers.

“The under-performance of traditional investments such as sovereign bonds has encouraged institutional investors such as pension funds and insurers to look at emerging asset classes like BTR for long-term steady income streams to match their liabilities, while the poor quality of accommodation and service that many renters receive from private landlords mean a purpose-built, professionally managed offer like what we’re providing through our partnership with Moda Living is highly appealing.

“We’ve seen healthy demand at our first building to open Angel Gardens, and we see regional BTR going from strength to strength, buoyed by strong fundamentals and a renewed political focus on powering up the UK regions.”

There are now 152,071 BTR homes at various stages of completion in the UK.

Of these 40,181 are complete, with a further 35,415 under construction and 75,475 in planning.

This represents an increase of 15% over last year.

Manchester and Salford lead the way with almost 23,000 BTR properties either completed or in the development pipeline.

Birmingham meanwhile nearly doubled its pipeline from 4,800 BTR homes, to over 8,000, with Leeds, Liverpool, Glasgow and Sheffield all seeing an uptick in BTR activity too.

Pete Ladhams, managing director of BTR specialists Assael Architecture, which has designed BTR projects for L&G, Grainger plc and Essential Living, added: “The meteoric rise of Build to Rent in the UK last year shows the appetite for genuine alternatives within the rental market.

“As residential housing shifts towards being more service-led, rental properties are offering residents far more than just a home.

“With a range of amenities, building-wide social initiatives and boasting great locations, BTR is showcasing what a more professional, secure and high-quality rental product looks like.”

Franz Doerr, founder and chief executive of deposit alternative provider flatfair, said: “These figures show the demand for professionally managed rental housing that makes the entire experience seamless.

“As people rent for longer periods there will be an increased focus on service, and Build to Rent housing is leading the way.

“As more units come online, service will be the differentiating factor between developments, and those that embrace the technological solutions that make things easier for tenants will thrive.”

By Michael Lloyd

Source: Mortgage Introducer

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Five Scottish cities in line for hundreds of family rental homes

Hundreds of new family homes for rental are to be built across Scotland thanks to a partnership deal struck between two property companies.

Five cities have been targeted – Dundee, Edinburgh, Inverness, Perth and Stirling – following the agreement between Scottish housebuilder Springfield Properties and Sigma Capital Group, the Edinburgh-based residential development and urban regeneration specialist.

The move follows the launch earlier this year of the Sigma Scottish PRS Fund – the first dedicated vehicle to focus on the creation of new homes for the private rental market in Scotland. It has initial resources of £43 million, with £30m provided by the Scottish Government’s Building Scotland Fund.

Under the new agreement, Springfield will build family homes for Sigma’s PRS property platform, with the majority of them to be built in the former’s “village” developments.

Graham Barnet, chief executive of Sigma, said the partnership would target the construction of hundreds of new homes for families across the five cities. Once built, the homes will be let under Sigma’s Simple Life lettings brand.

He added: “Springfield has a well-established reputation for delivering quality homes in Scotland and this partnership brings significant benefits for both sides, especially in accelerating the rate at which mixed tenure sites can be developed.

“We look forward to working with Springfield as we develop the partnership and extend our model in Scotland.”

Springfield Properties chief executive Innes Smith said: “We are proud to be chosen by Sigma as their first partner in Scotland to deliver homes for the private rented sector.

“This agreement stands to accelerate our delivery of homes, particularly on village developments, and we expect it to provide a further revenue stream, alongside our existing private and affordable housing activity, with good visibility over cash flows.

“It will also increase the number of homes available in the private rented sector and contribute towards our goal of ensuring that everyone within Scotland has a great place to live.”

Earlier this month, Sigma provided an upbeat outlook for the year and hailed its push into the Scottish private rented sector after revealing solid first-half numbers. Until recently, the firm had been focused on property projects and investments south of the Border.

Barnet said that market fundamentals remained strong with high levels of demand for quality, family-sized rental homes from workers on moderate incomes.

The interim results showed that revenues in the six months to 30 June increased by 19 per cent to £5.8m. Profit before tax for the period rose by 3 per cent to £4.3m. Sigma said the second half of the year had started well.

By SCOTT REID

Source: Scotsman

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Demand from landlords wanting to purchase rental homes plummets by over a third

Haart is urging the Chancellor to relax the buy-to-let taxation crackdown after its data showed the number of landlord registrations was down by more than a third during January.

The agent’s data showed the number of landlords registering to buy rose by 2% between December and January, but fell 37.4% annually.

In London, the number of landlord registrations was down 41.3% annually.

Its branches did, however, report that the number of national sales to landlords was up 13.9% annually in January.

In sales generally, branches reported a 15.2% annual boost in new listings, a 2.6% rise in buyer registrations and a 5.5% yearly increase in exchanges.

Paul Smith, chief executive of haart, said: “There is a clear appetite to move amongst buyers and sellers.

“Just one month from Brexit, buyers are continuing to act in ignorant bliss, ignoring formidable predictions that are still dominating headlines.

“With increased confidence in activity, we can expect price rises over the coming months.

“But January was very much a tale of two halves. The London market did not pick up in the same way that the rest of the UK did, and the number of new instructions for sale in the capital dropped by 2.6%.

“The lack of new homes to buy has, in turn, pushed up rental prices by 6% on the year to a record £1,924 as Londoners scramble for rental accommodation as an alternative to buying a home.

“This is a not a fault of Brexit, but rather a consequence of the Government’s misguided efforts to reform the property market with taxation on buy-to-let landlords.

“Until buy-to-let taxation is relaxed, we can expect rents to rise throughout 2019 and tenants will increasingly be faced with difficulty when finding a new home in the capital.”

Source: Property Industry Eye