Demand for private rental homes is forecast to rise by 1.2 million by 2019. This need can only be met by new, good quality, fit-for-purpose rented housing in volume.
Most developed countries have a large professional rented sector, in which corporate landlords account for an average 20% of the market - rising to around 40% in Germany and a low of around 2% in the UK.
Such landlords bring more professionalism, higher standards of accommodation, increased competition, more choice, a service-driven offering and greater occupier stability to the market.
In the UK, we are finally seeing real commitment from corporate investors, after a long period of absence. Our recent survey of leading investment houses identified a collective ambition to invest more than £30bn in the UK private rented sector.
But how do we turn this ambition into actual delivery? Pension funds and other institutions need stable, long-term returns. They invest for up to 30 years and are not interested in speculative gain. They need income rather than capital growth.
Any move towards curtailing that income could result in these investors retrenching, taking the view that political and regulatory risks are once again a prominent barrier to investment.
Jacqui Daly, director, Savills Residential Research
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