Britain is heading for a “rental revolution” as the private rented sector takes off, with £30bn of investment in the pipeline, according to a report from Addleshaw Goddard.
The Funding Britain’s Rental Revolution report highlights the growing use of institutional money to build rental accommodation.
The funding covers a gap in housing provision that councils and existing housebuilders are unable to cover and allows investors to match long-term liabilities with the stable returns of residential rental income.
The institutions most invested in the sector are APG, Hermes and Legal & General, the report found, with companies such as Grainger, Essential Living and Fizzy Living being the main developers of such sites.
The rise of institutional PRS investors comes after the buy-to-let market was cited as a risk to economic stability by the Bank of England and prompted cuts to tax breaks from the chancellor.
The report concludes that the country’s nine million renters will be offered higher standards of accommodation on longer-term agreements through institutional-funded PRS housing.
