Institutional investment is still uncertain | Opinion | Inside Housing

Institutional investment is still uncertain | Opinion | Inside Housing

Are Barratt’s plans to build houses to let and tax concessions in the recent Budget signs that City-funded corporate landlords will soon become private landlords? Or is it doomed to fail?

Demand for private rental housing is growing strongly. The first-time buyer market has all but collapsed and social housing construction is likely to fall. Yet people need to live somewhere.

For builders, the outlook is gloomy. The new homes market is in decline, with little prospect of revival. That is why some builders are contemplating becoming landlords, most likely in partnership with financial institutions.

In theory, residential property should be attractive to City firms, which are already big investors in commercial property. And, over the long-term, market rents and house prices rise with earnings, matching the liability profile of pension funds and life assurance companies.