.png)
conclusions
Here are our top 10 key findings for the outlook of investing in private rent
- Historically, income from residential assets has made up a much smaller proportion of total return than for other property investment classes. We expect that to change.
- Residential investors are switching their focus from capital growth to long-dated income.
- Risk-free rates will rise over the next five years, which will put upward pressure on yields.
- Investors can shrink their risk premium to compensate: they can minimise exposure to planning risk through covenants and to stabilisation risk through proactive letting strategies and realistic pricing. The Government can help by providing regulatory certainty.
- The outlook is positive for rental growth in strong employment markets. We forecast 17 per cent growth in London over the next five years.
- £2.7bn of BTR assets traded in 2017, 23 per cent more than in 2016.
- Many of the investors who will dominate the UK BTR sector in five years’ time may not have entered the market yet.
- Performance in 2018 so far suggests 50,000 student beds will trade this year, at a value of £5.3bn.
- Yields on student housing investments continue to sharpen due to strong investor demand.
- Student housing development prospects are strengthening in cities such as Nottingham, Reading, and Leicester.
.png)
