Major investment fund believes that the sector’s qualities “are well placed” to capitalise on changing attitudes towards property following the pandemic.
Summary:
- Build-to-rent has remained “largely unaffected” throughout the coronavirus pandemic
- Investment fund Legal & General believe that new property demands created by life in lockdown will make the build-to-rent sector more attractive in 2021 and beyond
- It comes as Legal & General is set to spend £100 million in Birmingham on its 16th build-to-rent development in the UK, underlining the sector’s continued appeal to institutional investors
Is build-to-rent the future-proof investment for UK residential property buyers?
The qualities synonymous with build-to-rent developments now sync with many of the new property preferences that are emerging as a result of the coronavirus pandemic.
That’s the view of Legal & General, one of the largest investment funds active in the UK’s build-to-rent market.
As more people spent time at home in 2020, new tenant priorities have been created as the pandemic impacted both work and homelives. Demand for large living spaces to facilitate working from home, fast Wi-Fi, and easy access to outside space has increased significantly in the last year.
And these are all qualities that are already at the core of build-to-rent’s offering.
“Many build-to-rent assets are well placed to benefit from some of the household behavioural trends and preferences emerging through the coronavirus pandemic,” said Legal & General in a statement. “Namely, an increasing need for homes with functional space to work, alongside convenient access to local cultural and leisure amenities.”
This positive sentiment comes as Legal & General announced it will be investing £100 million in a new build-to-rent scheme in Birmingham, taking the fund’s total number of build-to-rent assets in the UK to 16.
It stated that while the pandemic has driven “secular changes and a fundamental rethink” of many areas of the property market, “build-to-rent has continued to deliver a stable income return throughout the crisis”.
Despite wider uncertainty in 2020, UK property has continued to demonstrate the resilience with which it has long been renowned for by global investors.
In recent years, UK build-to-rent has established itself as the modern rental solution. Following the pandemic, could new tenant attitudes further drive the growth and global appeal of the sector?
“In the space of the last few years, the build-to-rent sector has really come into its own,” commented Dan Batterton, Senior Fund Manager in the build-to-rent division of Legal & General. “It has cemented its position in the UK as an asset class and successfully evolved away from the private rented sector.”
“Showing its resilience and relative counter cyclical nature of the residential sector, build-to-rent has remained largely unaffected throughout the coronavirus pandemic, as occupancy, rent collection and demand has remained high.”
