4 minute read
Frankfurt
Sectors
Student (PBSA)
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Purpose-built student accommodation (PBSA) is the build-to-rent sector that initially interested investors back in 1998, and has since grown and matured. It now accommodates more than 35% of full-time students in the UK and is held predominantly by a small group of large-scale investors.
£51bn
VALUE 2019
Source of investment
£600m £600m (2018)
(2018) 31% N America 23% Europe 23% UK 23% Rest of world
Full-time students living in PBSA Average investment cost for student bed
35% F U L L - T I M E S T U D E N T S I N U K 7.0% E U S T U D E N T S
£90k
Sectors
Build-to-rent (private)
The lure of the build-to-rent (BTR) market for investors is clear. Demand from the public is huge with more than 10m people living in private rented accommodation. For BTR landlords – the big banks, the insurers, the pension funds, the companies - there’s a
At maturity
1.7m households
£550bn
G R O W T H P O T E N T I A L £10bn 2018
guaranteed income at not a huge amount of effort and typically with no letting agents to consider. It’s a ‘win win’ for those with sizeable capital to invest. A particularly attractive incentive is the longer-term guarantee of potentially significant profits
80 000’s
70
60
50
40
30
20
10
0
Homes in Private BTR
30k 37.5k 72.2k
homes completed homes under construction homes in pipeline
with big increases in equity in the property. Real estate will undoubtedly comprise a larger proportion of investment funds for companies investing in this market. For developers, there are serious opportunities to make a sizeable profit in
constructing and selling off BTR properties. Costs associated with BTR are a critical consideration for developers and should be a key step at the early development stage of the project.
Source of investment Institutional share of investment
£600m £2.6bn
(2018) one third - institutional one third - public company
£880m
2018
£382m
2015
Sectors
Retirement
Currently, stock is primarily sheltered housing for social rent and owner-occupied developments by specialised housebuilders. However, a new market is emerging due to an ageing population with housing wealth.
At maturity
1.7m households
£244bn
G R O W T H P O T E N T I A L £120bn 2018
Over 570,000 householders are over 75yrs and could afford to rent a retirement home using the rental income from their main home – avoiding stamp duty. This sector could grow by 138% over current stock.
Existing retirement units
730k 50% built / renovated in 1980s
If National Planning Practice Guidance was updated to clarify the potential confusion and inconsistencies around the C2 and C3 planning use classes, this could unlock development for further retirement stock. This, in turn, could free up family housing and reduce social care costs. Statistics show the government can save £1,000 - £1,540 per year for each person that moves into retirement housing that has added care facilities.
Schemes have grown (number of homes per development)
340 units
50 units
Sectors
Care homes
The Alzheimer’s Society reports that 70% of elderly care home residents have dementia and one in six people over 80 in the UK have the disease.
Public Health England (PHE) estimate 645,000 people in England, over 65, have dementia – of whom only two thirds have had a diagnosis.
Funds are paid by private residents (with savings over £23,250) and local authorities for those that have no funds. However, goverment funding is at a restricted rate compared to privately funded residents.
This increased pressure, (particularly where homes have a higher proportion of local authority funded residents) has been responsible for a 33% increase in care homes being forced into administration.
Care home investment
£1.3bn
2018
£0.7bn
2017
420k elderly population in care homes
654k over 65’s have dementia
but only 2 / 3 are diagnosed
70% residents have dementia
Liana Di Ciacca Head of Scotland / NI Underwriting LDiCiacca@firsttitle.co.uk +44 (0)141 413 8803
Nicola McCluskie Senior Underwriter Scotland / NI Underwriting NMcCluskie@firsttitle.co.uk +44 (0)141 413 8803
Simon Hewitt UK Head of Sales & Marketing shewitt@firsttitle.co.uk +44 (0)207 160 8556
Martin Wilks Head of UK Underwriting mwilks@firsttitle.co.uk +44 (0)207 160 8604
The statistics and graphs contained within this document have been obtained from sources believed to be reliable.
It is the intention of this document to collate numerous sources of data relevant to the area, and by doing so, provide a comprehensive - and we hope - informative focus on the sector.
Should you have any comments, queries or feedback, please contact us at marketing@firsttitle.co.uk
First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603. Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.
