Savills head of Multifamily Development thinks institutional interest in Build To Rent (BTR) is good news for the UK’s housing crisis.
Investors’ interest in forward-funding BTR schemes is increasing despite the decline in investment volumes throughout 2023.
The advantages for the customer are immense as the quality of BTR developments benefit from long term investor interest, whom are setting high sustainability criteria and placing a greater emphasis on the operation of the entire building, future proofing from the outset. Developers like Socius, committed to social value and placemaking, are responding to this interest, which reflects customers’ desires and investors’ requirements as well as a genuine commitment to the delivery of great quality, well designed homes.
At Socius’ Edward Street Quarter in Brighton and MK Gateway, where Savills is helping source funding, the extra effort put into making a place is what investors and renters want to see.
Fire safety, sustainability, and the Building Safety Act’s (somewhat opaque) requirements, are just some of the challenges the sector is facing, and are focusing minds on quality and how to turn new design items like a second fire escape into an asset. The sky gardens in the BTR block at MK Gateway include the second escape stair that need not be enclosed, but overlooks the gardens, making a virtue of a necessity for example.
I have a huge passion for supporting this growing housing need, and have been hugely impressed, but not surprised, to see so many investors diversify strategies to support the growth of BTR. In my view, it makes complete sense for pension funds to be investing in an asset class that has material impact on its everyday stakeholders in the pursuit of affordable, safe and decent homes; all this whilst they benefit from attractive risk adjusted returns and annual inflation-linked rental growth!
More supply is the answer to the current housing crisis and we need to do all we can to unlock barriers to investment and ensure the continued growth of all housing tenures. The rationale for investors has never been stronger. Especially where the product is right.