Knight Knox attends: North West Generation Rent – Build to Rent & PRS

This morning Knight Knox attended the North West Generation Rent: Build to Rent & PRS Breakfast hosted by Insider in Liverpool. The event was an excellent chance to hear more about the future of the PRS, and how industry experts believe we can deal with any hurdles to create a buoyant market that is crucial to the successful future of the UK housing market.

Knight Knox attends: North West Generation Rent – Build to Rent & PRS

There were two debate panels and direct questions to industry leaders including;

  • Michael Dong, CEO, Investar Property Group
  • Michael Howard, Managing Director, urbanbubble
  • Darran Lawless, Development Director, Peel Land and Property
  • Ian Scott, Head of PRS, Lambert Smith Hampton
  • Adam Hall, Managing Director, Falconer Chester Hall Architects
  • Akeel Malik, Investment Manager, Urban Splash Residential Fund
  • Ed Ellerington, Managing Director, Packaged Living
  • Mark Kitts, CEO, Liverpool Foundation Homes Limited
  • Kate Ellison, Head of Development, Redwing Living

The event was very insightful and highlighted how the PRS market is evolving and how key players are looking toward the future. Some of the headline discussion points we took away from the event are;

• Ian Scott gave an early insight into the Lambert Smith Hampton Q3 2018 Investment Report which is to be published in the coming weeks and is set to include some interesting statistics around the PRS and other markets. Key points include:

1. Of the total £17bn invested in UK property in Q3 2018, 12% was investment into PRS developments. Five years ago PRS investment made up only 2% of the total – this shows the scope of growth in the market

2. Institutional investors are on the rise

3. Lowest ever volume of investment into the retail sector recorded this quarter

4. Lowest ever volume of investment into shopping centres recorded this quarter

• The panel discussed how changing lifestyles are affecting the offering in PRS schemes and how the industry needs to look ahead in this regard. They summarised that the younger generation are less tied to their roots and do not have as many valuables as previous generations have. Designers are responding to this in the way they plan buildings.

• They also discussed other demographics including families and how a change in lifestyle is having a domino effect on rental provision. The rise in people renting, particularly in urban centres, means that developers need to create more communities for families as well as young working professionals.

• The panel then moved on to discuss the need to change the way we look at offsite contributions to create communities. Rather than councils seeking affordable housing contributions, they should take contributions to build up amenities, education facilities and infrastructure around new developments to create communities where the market is naturally growing.

• The debate also mentioned the growth of the elderly sector of the market, a demographic that is now renting more than ever, resulting in specialist PRS schemes for the elderly popping up across the North West.

• Next, the panel highlighted the rise of technology and how developers should be looking to work with technology giants to understand how people’s lifestyles are changing and how the industry could respond positively.

• The affordability and viability of PRS was also noted, with many developers on the panel commenting on this as a key barrier for development. It was agreed that developments of 130-150 units allow developers to provide the necessary amenities needed to build a quality scheme.

• When asked what was next on their “strategic to-do list” many of the panel stated it was too find land that works for PRS development. Many acknowledged earlier in discussions that land values that can be afforded to good quality PRS schemes are reducing and land owners and agents expectations needs to change as PRS does not create the same land value as traditional housing once did.

The growth of developer-operator businesses is linked to the reducing profitability of managing PRS schemes. Many of the panel outlined slashed letting fee’s and increased regulations as reason why it’s more efficient to build and manage schemes on behalf of institutional investors and cut out the now less profitable middle man.


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