According to managing director Simon Redman, the private rental sector (PRS) in the UK is ripe for investment firms to step in and address the large unmet demand, with Invesco poised to lead the charge.
Redman said that over the coming years, UK PRS property could grow from a handful of units to 25% of its business. The company will work with third-party construction firms to plan and build the properties from scratch over the coming months and years.
“In the UK, our strongest focus is in residential, specifically the private rented sector,” Redman said. “The occupier demand is there, the right kind of supply is low, and there is also great investor demand.”
“The population growth of 25 to 34-year-olds in London is 4% a year and there is a continuing shortfall. There is also demand in other urban locations. There are almost no specifically designed residential rental blocks in London for this market. Our view is that this is what needs to be created.”
“There needs to be better quality, fit-for-purpose accommodation. Around 99% of landlords are individuals owning 10 or less properties and we think this has to change, he said. “There is clearly an opportunity for an institutional landlord with scale to come in. We have done this extensively in the US for years and we are now going to apply this knowledge and experience in the UK.”
“It seems that London, the southeast and the east of England are the runaway trains, with house prices again on the up and up,” said Rob Weaver, director of investments at Property Partner. “The continuing issue is a severe shortage of supply that is relentlessly driving prices. There are not enough properties being built and not enough homeowners putting up ‘For sale’ signs. Despite global economic volatility, there is a general feel-good factor in the UK, driven by higher employment, continued low interest rates and falling inflation, which is lowering the cost of living.”
