Developers of homes for rent believe Brexit won’t prevent build-to-rent from expanding over the years ahead.
Some experts believe current conditions represent “a perfect storm” for the emerging market of clusters of apartments funded by long-term institutional finance.
Experts believe build to rent companies will be well placed to buy new sites if traditional housebuilders offload sites. Britain’s currency woes would also make it substantially cheaper for foreign investors whose pension fund money backs many UK build to rent companies.
Martin Bellinger, chief operating officer at Essential Living, said:
“Build to rent developers have at times found it difficult to compete with volume house builders when it comes to acquiring sites, especially in places like central London where land values are sky high. But as development activity cools in the wake of Brexit, land prices and construction costs will probably drop, opening up new possibilities for the purpose-built rental sector.”
Mark Farmer, chief executive of Cast consultancy, said:
“Build to rent will be one of the sectors better protected from the fall out of Brexit. Less people will be taking out mortgages meaning the size of the rental market will increase. Land values will fall as for sale developers exit the market, so savvy build to rent players may benefit from a counter-cyclical strategy, focused on reducing build costs.”
Tony Brooks, managing director at Moda Living, said:
“With uncertainty in the current market there may be new opportunities for sites in city centres, Brexit could prove a real boon for build to rent. Even in cities outside of London, like Manchester, Leeds and Liverpool, there will still be strong demand for a quality rental product that offers hotel-style living to professionals who want convenience and flexibility, regardless of what happens to our membership in the European Union.”