One of the biggest players in the burgeoning Build To Rent sector says this new segment of the lettings market is likely to ride out Brexit uncertainty.
Legal & General’s Build To Rent fund manager Dan Betterton says that while Brexit may lead to people putting off large-scale personal decisions such as house-buying, they sill still need somewhere to live - so the rental sector in general may benefit.
“Anecdotally, following the referendum, we are hearing demand from more people wanting to rent and not wanting to buy. When we look round the world to established build to rent markets, such as the US, the rental sector provides consistent demand to the construction industry regardless of market conditions – it is less cyclical than building for sale” insists Batterton in an interview in Architects’ Journal.
He says there may also be less competition for land between now and the end of the year as traditional housebuilders pause land acquisition programmes, allowing Build To Rent investors to make their move.
“The one downside is that a falling pound means construction materials purchased overseas become more expensive – a lot of cladding comes from abroad. But other overseas investors are seeing the exchange rate as an investment opportunity” he says.
Legal & General, which in January announced its ambitions to become a major voice in Build To Rent, currently has three schemes underway.
The first is a scheme of 225 apartments in Salford; it will be L&G’s first operational scheme with residents moving in by May 2017.
Two other schemes are currently at the planning stage - 168 apartments next to Temple Meads station in Bristol, with proposals to expand that to 220 units, plus plans for 44 apartments at Walthamstow in north east London.