Several BTL industry experts have claimed that the growing number of corporate landlords entering the PRS could have a negative impact on renters and first-time buyers.
This follows the news that UK housebuilder Berkeley will be launching its own BTR platform, with plans to comprise an initial 4,000 homes across 17 of its sustainable brownfield regeneration sites as an initial portfolio.
Berkeley joins several other corporate firms which have expanded into the BTR sector, including Lloyds Banking Group and John Lewis.
Asked by Newspage how they feel about institutional investors entering the UK PRS, many experts view this as a negative development, claiming that this trend could lead to a reduction in housing stock for first-time buyers and rent increases for tenants.
“Larger corporate landlords in the residential market will potentially be bad news for tenants, giving them huge control of rental pricing while maintaining a vested interest in keeping property prices high by controlling new build development,” said Justin Moy, managing director at EHF Mortgages.
“Sadly, reducing property stock for first-time buyers will only drive prices higher for this ever-suffering demographic.”
Ben Perks, managing director at Orchard Financial Advisers, added: “Berkeley Group is making a bold move to monopolise the rental market, and the next government needs to keep an eye on this growing trend.
“These large corporates are the ones that should be penalised with tax restrictions, not those people who have one BTL with pension provision in mind.
“If builders are keeping property for self-gain, it will reduce what’s available to first-time buyers.
“While this will help with government house building targets, the household crisis will rumble on.”
Simon Bridgland, director at Release Freedom, pointed out that this move could mean more professionally managed properties in the PRS, and thus lead to an increase in quality and standards for rental properties.
“Corporate landlords have a greater amount of scrutiny on the standard and upkeep of property within their control,” he added.
“It could, however, place more pressure on some landlords in the private rental market to up their game, as many are still lagging woefully behind in the upkeep and general standard of their tenanted properties.”
Meanwhile, Kundan Bhaduri, property developer and portfolio landlord at The Kushman Group, claimed the greater competition in the PRS brought by corporate firms entering the market could work in smaller landlords’ favour.
“Berkeley Group joins the long queue of corporate, faceless and emotionless landlords who line the streets of Britain, renting their BTR spaces to eager tenants — this move will actually demonstrate the stark difference in the quality of offering and support, alongside the human touch that professional, human landlords provide their tenants.
“With property becoming more of a people-centric business, it remains to be seen how the corporate landlords compete with those that work in the business with their own money, because they genuinely want to offer housing as a service, compared to the corporate landlords who will deal with each dwelling and each family living in it as another entry in the spreadsheet.
“Good, hard-working professional landlords will always welcome competition to demonstrate the differentiated value they bring to the table compared to corporates.”
