One recent example is the London property company Avanton, a developer launching a new £500m build-to-rent fund.

The company says the fund is to be used to buy more land in the inner London boroughs and to eventually build 5,000 homes to rent by 2023.

Avanton’s plans send an optimistic note out to the private rented sector. It’s a huge vote of confidence in London’s inner city rental market recovery after Covid and the unsafe cladding crisis affecting many inner London homes.

Explaining the level of confidence Avanton has over a rapid recovery, a company spokesperson has said that “despite the obvious challenges the property market has been extremely resilient and recovered rapidly last year after the lockdown”.

Avanton is to use monies raised in the fund to target sites with land values of between £20m and £100m in areas, including: Islington, Southwark, Wandsworth, Wimbledon, Hammersmith, Lambeth, Camden and Brent, with each development providing between 300 to 1,000 homes.

Avanton told City A.M. last week that it has several build-to-rent projects in the pipeline, including a £250m development in Richmond and a £750m scheme in Southwark’s Old Kent Road.

Omer Weinberger, Avanton chief executive, told City A.M.:

“The only viable solution to London’s housing crisis and the shortage of supply of new homes in the capital is delivering multiple tenure schemes and expanding BTR, intermediate and social housing provision.

“This is why Avanton is currently undergoing a three-year expansion into the build-to-rent and mixed-tenure sectors.

“To implement this we have set aside £500m and are seeking attractive land opportunities to grow our BTR development pipeline yet further.”

The PRS is still dominated by far by small-scale private landlords. The mainstream institutional investors account for only a small proportion of the total market in the UK, but nevertheless this sector has grown substantially over recent years, encouraged by government policy. In some locations, the introduction of a substantial number of residential units to let, albeit they are premium lets, represents a threat to existing buy-to-let landlords.

(Image – Old Kent Road Development)


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