UK rental properties don’t meet the needs of modern-day tenants, with the vast majority (83%) stating they would pay more for a property that did. VIEW ARTICLE
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Hot on the heels of their recent acquisition of NW Estates, Ascend Properties has wasted no time at all in keeping up with the current flurry of M&A activity in the estate and letting agency space, today announcing their purchase of Rent Smart UK. The deal for the North Manchester based lettings agency was completed on 1st March.
Ascend Properties have ambitions to operate up to a total of ten estate and letting agency branches within three years and are evidently fulfilling this aspiration quickly.
The acquired Rent Smart UK business has 240 buy-to-let properties in its management portfolio and will retain its name and its staff, including Director Melanie Hughes, who will continue to manage the office day to day alongside the Ascend management team.
As with all of Ascend’s acquisitions, Rent Smart UK will now benefit from the support of their larger parent company boosting marketing, technology, finances and profile.
Ged McPartlin, Managing Director of Ascend Properties says
“We’re quickly acting on our ambitions to expand our sales, lettings and management reach across the North of England and we’d still love to hear from smaller independents that would be interested in a sale or a collaboration.
“As you can see, we don’t seek to simply sweep in and change everything and generally want to maintain existing brands and certainly the people and we want to work with businesses that are already well regarded in their areas. Ascend can then add our own expertise and significant resources and ‘super-charge’ these acquisitions to even greater success.”
Ged McPartlin can be contacted at [email protected]
Build to rent completions are estimated to double by 2025, according to a forecast from build to rent (BtR) specialists, Ascend Properties.
Build to rent properties are typically owned by funds, institutional investors and real estate investment trusts (REITs), which unlike regular types of housing are designed and built specifically for residents.
Year on year completion trends
Between 2017 and 2018, the number of new build to rent completions reaching the market grew by 1%.
The sector then gained serious momentum between 2018 and 2019, with new completions jumping by 54% on an annual basis. To put this momentum into perspective, new build completions excluding build to rent increased by just 6% during the same period.
With Covid causing havoc across much of the market in 2020, it’s no surprise that just 10,158 new build to rent completions have reached the market, resulting in a year on year decline of -20%.
However, it is estimated that this decline has been more pronounced across the rest of the new build sector with an -28% fall in completions for non B2R new builds, which once again highlights the strength of the build to rent sector in the current market.
Overall sector growth
Despite this stutter in new completion levels, the overall size of the market continues to increase. Between 2017 and 2018, the cumulative total number of build to rent completions saw the sector grow by 36%.
The build to rent sector then grew by a further 41% between 2018 and 2019. Despite the decline in new completions during 2020, the stock that has reached the market means the build to rent sector has grown by a further 23% cumulatively.
Forecasted sector growth
Based on the best available data for the sector, Ascend forecasts that a further 73,535 build to rent completions should reach the market by the start of 2025. In addition to the existing 53,750 build to rent completions already within the market, this forecast could see total build to rent stock hit an estimated 127,285 completions.
Managing Director of Ascend Properties, Ged McPartlin, commented:
“The build to rent sector is an increasingly important part of the market, and we see that trend continuing over the next five years.
There’s a growing recognition that owning property may not be the norm in the future, as is already the case in numerous other European countries. In the UK’s most expensive regions such as London, many already rent for far longer than we’ve seen traditionally and while we remain a nation of aspirational homeowners, not everyone is as focussed on realising this aspiration.
Therefore it’s important that residents are able to live in high-quality properties fit for their needs. Build to rent fits this gap perfectly, so it’s no surprise that the sector has seen an impressive level of growth in just a few short years, as well as a notable level of investment.
We’ve seen a number of big housebuilders and institutional investors shift focus towards the build to rent sector in recent years and it has become an integral part of forward planning where stock delivery is concerned. Those yet to realise this are likely to be playing catch up as the sector continues to build momentum in the coming years.”
Ascends forecast on Build to Rent completions by Q1 of 2025 done based on historic Build to Rent sector data and using an Exponential Smoothing Forecasting model (ESF), including interpolation, accounting for seasonality, and based on a 95% confidence interval.
The build to rent sector now accounts for 1% of all UK rental properties, having surged by 135% according to the latest research by (BtR) specialists, Ascend Properties.
The build to rent sector has gained momentum in recent years and it’s clear to see why. Previous research by Ascend found that there are now 2.4m more of us living within the rental sector when compared to a decade ago, so developments designed and built specifically for renters are more in demand than ever.
While build to rent properties are appealing in terms of their modern design and living standards, they also provide an additional sense of community via shared areas such as gyms, lounges, dining areas and other social outlets such as games rooms.
Ascend’s research shows that just four years ago, there were 22,831 build to rent properties in the UK rental market, accounting for just 0.4% of private rental stock. In London, the level of build to rent stock was greater, with the 12,709 build to rent specific properties accounting for 1.2% of the total rental market.
In the three short years since, the sector has grown considerably. Across the UK, build to rent now accounts for 53,750 homes within the private rental sector. That’s a 135% increase in build to rent stock since 2017, with the sector now accounting for an estimated 1% of all UK rental properties in the private sector.
While this might not sound a lot, the private rental sector itself has grown by just 0.3% since 2017 where the total estimated number of private rental homes is concerned.
Again, the impact of the build to rent sector is even more notable in London. The sheer volume of build to rent stock in the capital has increased by 109% since 2017, with the current total of 26,625 accounting for 2.5% of all private rental properties in London
While the London rental market has grown at a considerably faster rate than the wider UK, it has still seen just a 4% estimated increase in total private rental stock since 2017, further highlighting the impressive growth of the build to rent sector within this space.
Managing Director of Ascend Properties, Ged McPartlin, commented:
“Although build to rent has been around for quite some time, it’s only in recent years that the sector has started to become a serious area of focus for many big housebuilders.
This growing trend is clear when analysing the overall rental market and the increasing number of build to rent properties within it, with the sector now accounting for an estimated one per cent of all private rental properties.
However, this impressive growth is just the tip of the iceberg and we expect to see the share of rental homes accounted for by build to rent continue to grow.”
Sigma Capital Group plc is one of the leading providers of BtR family houses across the UK, and is an Investment Advisor to The PRS REIT plc. Sigma has a unique delivery platform, working closely with housebuilding partners, investors, Government, local authorities and managing agents alike to deliver a long-term, high quality product and an exceptional customer service for residents, whilst also delivering a complete and long term solution for investors. Sigma has delivered over 3000 new homes for rent across the UK on behalf of The PRS REIT plc, which will rise to an imminent total of 5,200 new homes. Sigma has also delivered over 1,600 homes for Gatehouse Bank’s two fund streams: UK PRS and Thistle.
Gatehouse Bank is a UK Bank specialising in buy-to-let finance, commercial property finance and more. Gatehouse Bank setup two major BtR funds, consisting of around 2000 properties in total, and appointed Ascend as the sole lettings and property management agents. Through effective and efficient management, the portfolios were extremely successful and increased in value over the course of circa 5 years, which later resulted in Gatehouse Bank selling one of their BtR portfolios that was reported as a ground-breaking deal within the industry.
Simple Life is one of the UK’s leading private rental brands focused on the provision of high quality, new rental houses. Owned and created by Sigma Capital Group plc, the Simple Life portfolio now has over 3000 completed homes (as at December 2020). Simple Life offers renters the security of long-term tenancies, a professional service and total peace of mind that their rental journey will be made easy. In 2020, Ascend was appointed to asset-manage the Simple Life regional portfolio on behalf of Sigma.
Live DifRent is a portfolio of Build to Rent regional homes which has been under Ascend’s management since Q1 2019. It consists of an investment fund managed by Gatehouse Bank and Sigma Capital Group plc, with property sites located in various areas across the North West and West Midlands.
Grainger Plc are one of the UK’s largest professional landlords, operating since 1912. Since establishing a solid partnership in 2017, Ascend have worked with Grainger on a variety of lettings projects, including: Clippers Quay (Salford Quays), Tribe (Ancoats/New Islington), Indigo Blu (Leeds), as well as other sites across the North.
A consumer brand of Select Property Group, Ascend was appointed as the official lettings agency for this Build to Rent development which opened in January 2020. Throughout the partnership, Ascend has delivered many innovative ideas, from exclusive launch events to Virtual Reality tours.