Following the general election, there is yet again uncertainty surrounding the politics of the UK housing market. The housing minister has changed, with Gavin Barwell losing his seat, replaced by Alok Sharma.
Currently, there are strong policies supporting the residential sector with government recognition of build-to-rent (BTR) schemes. There has been very encouraging dialogue and rational thinking on this from both James Murray, deputy mayor for housing at the Greater London Authority, and the government.
They are aligned on promoting BTR policies and good progress has been made on housing, but change may be on the cards given the unstable political environment. What we really need is longevity of policy if we are going to see any real change over the long term.
So, where are we now in the evolution of the residential marketplace? One useful barometer of growth and maturity in the sector is the people that make it tick.
As a guest at Property Week’s Resi Awards 2017, I witnessed an interesting phenomenon first-hand: the emergence of award nominees and winners from relatively new start-up businesses alongside those with long histories.
Combining the brave new world of branding, proptech, digital and artificial intelligence with the more traditional operations, we will see a further push to more varied and differentiated models and, more importantly, a better choice for consumers. Seeing firms like SAY Property Consulting, Conductor and LIV alongside traditional companies is heartening.
Five years ago, BTR was just a twinkle in the eye of a number of early adopters and from its infancy there have been baby steps with the successful launch of some new buildings. We’re yet to see numerous built-for-purpose properties transact, but a number of permitted development schemes have emerged, which is great news.
From an institutional perspective, we are witnessing the first phase of a strong, healthily competitive marketplace. As representatives from these institutions, we frequently see each other while raising capital and bidding on similar schemes - competition that we want to encourage as it is crucial to propelling the future growth and development of the industry.
Despite a limited number of experienced people needed to drive the sector forward, talented professionals are beginning to migrate from the world of commercial real estate into residential for three key reasons: it’s exciting, it’s growing and it’s a significant source of opportunity.
We are witnessing the first phase of a strong, healthily competitive marketplace
It’s also an interesting time for the residential team at M&G Real Estate, with the launch of two of our most recent BTR schemes - both with significant pre-lets agreed, but slightly different models of renting.
Our £51.5m BTR development with Crest Nicholson at Kilnwood Vale near Crawley, West Sussex, is scheduled for launch later this month. This scheme is our first low-rise apartment development in a suburban location, centred on a communal club house and tennis court games area, and is akin to a suburban multi-family housing model common in the US.
Drawing on the scheme’s proximity to Gatwick Airport’s employment zone, we are looking forward to seeing how it progresses.
Meanwhile, we have just reached practical completion at our £48.5m development at The Rehearsal Rooms in North Acton, where our first residents moved in last month. At both schemes, we have full-time, specialist on-site services managers, setting the stage for the next chapter of the three-year journey that has brought us this far.
It’s a busy time for us and for this fast-growing sector as a whole. I believe that the next few years will be a learning curve for everyone involved in BTR, and we’re looking forward to evolving our thinking with the progression of this market.
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