Mind the (rental) gaps.
We know there is a gap in the rental market – a void that needs filling by more quality homes for private rent – but there’s an impending gap in the skills market too. With thousands of privately rented units being constructed across the country under the Build to Rent initiative, the demand for professional property management is only going to increase.
Built to Rent takes lettings from a private landlord-dominated sector to an institutional grade investment business. There will be an increasing need for volume management, stakeholder-focused reporting, transparency, profit management and asset protection as charities, REITs, pension funds and investment vehicles pile into this emerging market.
Earlier in 2016, Transport for London confirmed serious intentions to enter Build to Rent, allocating some of its 5,700 acres of land for development. The organisation is in dialogue with property firms such as Berkeley Group and Peabody Trust to strike up development deals for the first 300 acres of land.
It is anticipated Transport for London’s first three sites will create 600 new homes in London – that’s 600 units flooding the private rental market requiring professional management, especially since the estimated £100 million revenue raised is earmarked for reinvestment back into the public transport network. That makes us all stakeholders with a vested interest is successful management and asset protection, right? Who within Transport for London has the knowledge, time or ability to manage six rental units in a legally complaint way, never mind 600? That’s 600 units from a single wave of development from just one organisation. Multiply this and we are facing a property management crisis.
If Transport for London is cashing in, who will join them? A report issued last summer by the Centre for Theology & Community together with Housing Justice suggested the Church of England use some of its £2 billion land estate to address the housing crisis – of which there are 100,000 acres in England and Wales. I can guess there are already plans underway for Build to Rent activity but bishops fixing broken boilers? It’s never going to happen.
Build to Rent is ushering in a new era for the PRS. There are already solutions to the property management conundrum – exploring the services out there is the next step.
* Simon Duce is managing director of the ARPM Group, who provides national outsourced lettings, property management and relocation services for funds, REITs, organisations, letting agents and property managers.
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