Has Brexit increased the need for rental property investment?
PUBLISHED: Selected Property Group | UPDATED: 25 July 2016
URL: http://www.selectproperty.com/2016/07/has-brexit-increased-the-need-for-rental-property-investment/
One of the UK’s biggest institutional investors says its hearing more demand for people wanting to rent rather than buy following the EU referendum.
Summary:
- Legal and General says its “hearing more demand from people wanting to rent” following the UK’s vote for Brexit
- The institution has invested heavily in several new build-to-rent schemes across the UK
- Build-to-rent could provide 10% of the new homes the UK needs
There’s currently a currency window of opportunity to invest in UK real estate right now – and it’s the build-to-rent sector international investors should choose.
Following the EU referendum, the pound fell to its lowest value for 31 years. For those investors dealing in dollar-pegged currencies, it creates an immediate opportunity to buy UK property.
Now, one of the country’s largest institutional investors has outlined why those looking to capitalise on this opportunity should look at the build-to-rent sector in particular.
In an interview with Architects Journal last week (July 21st), Dan Batterton, Fund Manager at Legal and General, outlined why his company has been a key investor into the rental sector that is set to be worth £50 billion by 2020.
And responding to a question about the sectors performance following the Brexit vote, Batterton responded:
“There is a natural hedge in investment into the rental sector. In times of economic uncertainty people put off large decisions like house buying, but they still need to live somewhere.
“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.”
Legal and General has invested heavily into a number of build-to-rent developments across the UK, from Manchester to Bristol, aware of the growing demand to create a product for a generation of British workers who actively choose to rent their homes.
Batterton also believes the backing the sector has received from outgoing housing minister Brandon Lewis, and his new successor Gavin Barwell, underlines the importance the UK government places on build-to-rent investment.
With Britain in the midst of a housing shortage, build-to-rent, Batterton asserts, could “provide 10% of the new homes we (the UK) needs”.