Renting is here to stay in the UK but it has a way to go to be recognised as an asset class equal to that in the US, according to Nick Jopling, executive property director at London-based residential specialist Grainger.
Renting is here to stay in the UK but it has a way to go to be recognised as an asset class equal to that in the US, according to Nick Jopling, executive property director at London-based residential specialist Grainger.
Jopling was moderating a packed panel session on the private rental sector (PRS) at MIPIM UK this week.
The UK needs 250,000 new homes every year to mitigate the country’s housing crisis, and more of these should be in the private rented sector to meet the needs of an increasingly young and fluid working population.
James Lidgate, head of residential development at Legal and General, said: ‘There is a lot of talk about generation rent or generation buy. I think we need to aspire to a generation of choice, buying and renting.’
But it’s still more risky to build to rent than buy, with the private rented sector seldom trading at a premium, more often at a discount, according to all panel members.
Adrian Owen, national head of residential at BNP Paribas, said: ‘It’s the operators who are key to getting this sector going, and that is the Americans. They want to build scale and they want to built it fast.’
Public sector
However, it’s the UK’s public sector that is leading the way. Housing association Thames Valley Housing launched Fizzy Living in 2012, the first company in the UK specifically servicing the needs of young professionals seeking accommodation in the private rented sector. It has 500 tenants across a small number of locations in London and the South East. Panelist Geeta Nanda, CEO of Thames Valley Housing, said: ‘We have seen rocketing investment value in our model.’
