UK Build To Rent (BTR) sector is continuously rising and achieving new heights. Investment opportunities are very high in this sector due to the rise in demand for rented homes with easy maintenance. Institutional and Retail Investors are investing Billions of Pounds in this sector for stable returns for a long period of time…
Growth Factors
High rental growth due to high demand and shortage of supply in UK Homes.
High Inflation in recent years.
People are more interested in rental homes compared to the past due to affordability issues.
People are open to moving to different big cities because of better job opportunities
People are looking for a high-quality home that meets their needs and a good service in the rental industry
Covid-19 has also changed the mindset of people. They are more interested in private rental properties for themselves instead of sharing with other people on a rental basis.
UK is a desirable location to live in for people from all over the globe.
Investment in Build to Rent
As per British Property Federation and Savills survey existing investors were particularly active in 2021. However, in addition, the pool of investors looking to access the market is deepening. New Investors are also taking a keen interest in this market and investing in new projects in this sector, a move which has intensified competition to either create or acquire stock.
As per Development Finance Today Magazine big property developers are entering the Build To Rent Sector i.e. Strawberry Star Group, The Harlow development.
The government last December increased housing targets by 35% in 20 cities selected for additional growth. The cities are #London, Birmingham, Liverpool, Bristol, Manchester, Sheffield, Leeds, Leicester, Coventry, Bradford, Nottingham, Kingston upon Hull, Newcastle upon Tyne, Stoke-on-Trent, Southampton, Plymouth, Derby, Reading, Wolverhampton, Brighton, and Hove.
Current Build To Rent Market Status
New analysis from British Property Federation (BPF) shows there are now 212,177 build-to-rent homes in the UK, including both London and the regions, of which 70,785 are complete, 42,119 under construction, and 99,273 in planning.
Penny Davidson, an Associate Director of Residential Valuations in CBRE said: ” The BTR market is gaining momentum and this is further demonstrated with some key changes to our Prime Regional and Other Regional Centre yields.”
How to Invest in Build to Rent
Build to Rent isn’t just for well-known developers. Individual property investors can also take advantage of the sector’s potential. If you want to know more about investment opportunities in the Build To Rent (BTR) sector in London and the southeast, we can certainly help you with that!
At PLMD Group we offer property investors the opportunity to invest in a share of the rental income that we produce from our multiple sites. We have more than 70 real estate assets under management and more than 20 years of experience in real estate development & management. We are always on the lookout for undervalued real estate and land with the potential to become a high-value development and provide a solid return on investment in this Build To Rent Sector.
If you’re interested to find out more, please get in touch or email our investment team at invest@plmd.co.uk. We would love to tell you more about our exciting investment opportunities! #PropertyInvestment #PropertyDevelopment #Property #UKProperty #BuildtoRent #PropertyFinance #PLMDGroup
Due to the potential for losses, the Financial Conduct Authority (FCA) considers investments in bonds and private equity offerings to be high risk and complex.
What are the key risks?
1. You could lose all the money you invest
If the business offering this investment fails, there is a high risk that you will lose all your money. Businesses like this often use risky investment strategies and typically operate in competitive or uncertain markets.
Advertised rates of return aren’t guaranteed. This is not a savings account. If the issuer doesn’t pay you back as agreed, you could earn less than expected or nothing at all. Higher advertised rates often indicate a higher risk of losing your money. If it looks too good to be true, it probably is.
These investments are sometimes held in an Innovative Finance ISA (IFISA). While potential gains from your investment will be tax-free, an IFISA does not reduce the risks of the investment or protect you from losses.
2. You are unlikely to be protected if something goes wrong
The business offering this investment is not regulated by the FCA. Protection from the Financial Services Compensation Scheme (FSCS) only considers claims against failed regulated firms and does not cover poor investment performance. Use the FSCS investment protection checker here.
The Financial Ombudsman Service (FOS) does not consider complaints related to non-FCA-regulated firms. For FCA-regulated platforms, FOS may review certain complaints. Learn more about FOS protection here.
3. You are unlikely to get your money back quickly
Bonds, private equity investments, and other financial products backed by property projects may face delays or overruns, tying up your funds for longer than expected. In some cases, businesses may fail altogether and not repay your money.
Early cash-out options are typically unavailable. Secondary market sales, if allowed, may not guarantee a buyer or desired price.
4. This is a complex investment
These investments often involve complex structures that invest in other businesses, property, or projects. This makes it difficult to track where your money goes and assess risk accurately.
Investments in bonds or private equity linked to property can carry high levels of uncertainty and risk. Seek independent financial advice before deciding to invest.
5. Don’t put all your eggs in one basket
Concentrating your money in one type of investment or business is risky. Diversify your investments to reduce reliance on any one to perform well.
A good rule of thumb is not to invest more than 10% of your total money in high-risk investments. Learn more here.
6. The platform could fail
If the investment platform or issuer fails, it may be challenging or impossible to recover your funds. Plans to handle such failures may not always work as intended.
7. The value of your investment can be reduced
If investment projects experience cost or time overruns, businesses may issue new shares or increase borrowings, potentially diluting your returns.
New shares or borrowings may also be prioritized over existing ones, further reducing the chances of a return.
For further information about bonds and private equity investments or to protect yourself, visit the FCA’s website here.
Learn more about minibonds here.
For details about investment-based and loan-based crowdfunding, visit the FCA’s website here.