Major build-to-rent fund launched

Britain’s newest build-to-rent fund has been launched, with Places for People (PfP) announcing a £550 million budget to spend across the UK.

The fund has been instigated by PfP Capital, which was set up last year by the housing association as a means of investing in this growing market in recognition of the expansion of both the public and private rental sectors.

It will be seeded with a trio of residential schemes, worth £150 million, prior to the addition of longer-term capital to the fund.

This will then enable the fund to be spent on developments of 300 or more units, with the vision being for between six and eight large-scale schemes to be established in towns and cities across the regions.

Alex Notay, who is moving from his current role of director of product and service innovation at Places for People Group to manage the new venture, said: “This is an exciting time for the sector and the new fund will give investors an unparalleled opportunity to invest with one of the most experienced teams and a manager with a socially-conscious DNA.

“Institutions recognise that the UK build-to-rent sector has potential to deliver significant, stable returns over the long-term but also that social impact is now a genuine priority for investors.”

While the PfP Capital projects will still be operating in the social housing sector, letting agents and landlords may detect a larger picture; one in which build-to-rent is being increasingly seen as a significant part of the housing mix, as opposed to an assumption that building new homes is purely a means of supplying the owner-occupier market.

Moreover, the fact that PfP Capital is focusing on locations outside London emphasises another trend. Although build-to-rent in the UK was once focused on the metropolis, this has long since ceased to be the case. Indeed, both private and social rental sectors are increasingly looking elsewhere, not just to the usual places like Manchester, but smaller towns and cities too.

With the government changing planning rules last year to allow councils to plan for build-to-rent, the PfP fund is likely to be just one of a number of projects aimed at bolstering the supply of newly-built rental properties across the UK.