Build-to-rent schemes are increasingly attractive to lenders because they do not have the same absorption risk or sales risks as regular housing developments, according to Investec’s Hayley Scott.
“For us, it’s very exciting, it’s just about finding the right client conditions and product,” she said, speaking as a member of a panel looking at how PRS blocks can de-risk larger developments.
Cheaper finance would help to increase the viability of rental development against housing for sale, according to the panel.
Despite a massive increase in the number of rental homes being developed, housing for sale remains more profitable. However, PRS developers working as part of larger developments can come in early, helping to de-risk, place make and provide a cash injection for the development of housing for sale.
“It’s the residential equivalent of an anchor tenant,” said Andy Barnard, partner at Trowers & Hamlins.
He added: “The attraction of bringing in PRS developers, looking at it as part of a wider scheme, is clearly the option of forward funding coming through that did not exist previously for developers.”
“It helps with cash flow and wider place making as well,” said Scott, “and it does help bring forward those larger sites.”
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