A senior figure from the banking world has claimed that institutional investment is the ‘golden ticket’ to solve the UK’s supply and quality problems within the private rented sector (PRS).
Cedric Bucher (main image), who heads up Hearthstone Investments but has also worked at AXA, Barclays and Mckinsey, has told local councils that without City money the UK will always struggle to provide enough good quality and green homes at volume, and that much of the PRS and social housing sector is ‘not fit for purpose’.
He also points out that local authorities are left to solve issues caused by rogue landlords within the private rented sector, “diverting valuable time, money, and resources away from the already hard-pressed budgets”, he says.
“When it comes to private rented homes, surely the golden ticket is to increase the volume and ensure housing stock is high quality, is well-managed and built in locations where it’s needed the most?
“Institutional investors, including public and private pension funds, insurance companies and savings institutions have the potential to make this change.
Read more: What does built to rent mean for BTL?
“By investing in residential housing for the private rental sector, institutional capital has the power to provide a boost to the UK’s private housing stock, both in terms of the numbers being built, and by providing reassurance to tenants that they will enjoy a high-quality, energy efficient home which is owned and managed by a bone-fide landlord.”
“When it comes to quality, institutional investors have an inherent commercial incentive to maintain properties well and to carefully select their residents and look after them. Good quality housing equals happy committed residents, which in turn equals resilient returns.”