A big new business venture aims to give private landlords a run for their money by buying up and refurbishing thousands of rental properties.
Real estate fund manager, Moorfield Group, and PropTech residential investment platform, Bricklane, have joined forces to invest £600 million in buying up 2,000 one to four-bedroom houses and flats over the next two years, mainly in London, Bristol and the South East – and “professionalise” them.
Simon Heawood, CEO and co-founder of Bricklane, tells LandlordZONE that it works closely with agents in its target areas and can move fast and buy in cash.
He adds: “We use technology to assess all on-market properties in our target markets, every day. We have had productive relationships with agents bringing us off-market properties too, for instance when portfolio landlords in their client base are looking to exit the market. The partnership is happy to buy properties tenanted, without landlords needing to vacate the property pre-sale.”
By focusing particularly on the 98% of the rental market owned by the UK’s 2.5 million buy-to-let landlords, it expects to deliver attractive returns and provide quality homes to a wider range of tenants, while also avoiding the carbon-cost of demolition and building new homes.
Rise of BTR
Bricklane this partnership sees the UK beginning to follow the example of the US single-family (or build to rent) residential market, where institutional investment in existing properties has grown from almost nothing to $40 billion in ten years.
Simon Heawood, CEO and co-founder of Bricklane, says: “The time is ripe for institutional capital to access and professionalise the mainstream private rented sector.
“Demand is at an all-time high, while it is becoming less financially attractive for individual landlords to operate in the sector. Moreover, tenants are rightly demanding higher quality service and more secure contracts for their homes.”
Properties will be managed by Bricklane through its proprietary technology platform, Compass.