Carter Jonas' Build to Rent team headed by Lee Richards has been growing in the past year, experiencing significant wins in the sector. Lee, Rebecca and Becky discuss market conditions, prospects, and what advice they'd give to their teenage selves.
How would you describe the BTR market currently?
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ISSUE 01 | OCTOBER 2022
“The scale of the pipeline – the funding, development and demand – means that just from a professional perspective, it's a huge opportunity.”
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Lee Richards, Head of BTR & PRS: 'Where there is a challenge, there is opportunity' would sum up the current market. There is slightly more scrutiny of scheme feasibility because everybody's naturally more risk-averse than previously. It's certainly more competitive and more challenging. But, for good quality schemes built on the right feasibility and demographics, there's still a lot of market potential.
Rebecca D'Erlanger, Investment Analyst: Given increased mortgage rates, people are struggling to purchase houses. With a shortage of rental accommodation in the UK, the BTR market seems to be booming. This, along with the risk of recession and increased interest rates, is showing a slowdown of capital and softening yields.
Becky Ellis, BTR Operations Manager: Busy and Competitive. As a relatively new asset class, service and delivery are key factors from an operating perspective.
Lee Richards: Getting the right opportunities in front of the right investors will be the biggest challenge. Until a few months ago, it'd been relatively straightforward to identify which pieces of land would sit well with which developers and investors, but there are many more entrants to the market. And there's a lot of potential institutional capital waiting to be deployed. So it will be about timing and the right scheme for a particular site.
What is the key challenge for the sector in the next 12 months?
Lee Richards,
Head of BTR & PRS
Rebecca D'Erlanger: The UK cost of living crisis is a challenge. Given the high amenity offering you would normally expect from a BTR scheme, this may not be a priority in the next 12 months (probably longer) for tenants who require more affordable rents. This is backed up by the fact that many renters are now looking for bills included in agreements, which is potentially very expensive for operators if energy prices continue to increase.
One bit of advice you would give someone looking at the BTR sector?
Lee Richards: The scale of the pipeline – the funding, development and demand – means that just from a professional perspective, it's a huge opportunity. Having recruited recently, there's talent out there, not just within the property sector but in hospitality and other industries that we can bring into the sector. It's an exciting time.
Rebecca D'Erlanger: It's a great sector to be in at the moment, with a lot of new investors entering the market. From a job perspective, it's helpful having a background in numbers or a good understanding of them.
Becky Ellis, BTR Operations Manager: The demand for housing isn't being met, people will always need a place to live. Residential rental incomes have remained resilient.
“It's a great sector to be in at the moment, with a lot of new investors entering the market.”
Rebecca D'Erlanger, Investment Analyst
What career advice would you give your teenage self?
Becky Ellis, BTR Operations Manager: Property wasn't on my radar, but it is exciting, with different avenues to explore. I'd tell my younger self to be open to opportunities that lie ahead.
Lee Richards: I always wanted to be a rugby player but wasn't really tall enough. If I'd realised I wasn't tall enough sooner, I would have got into property five years earlier. My advice to my teenage self would be: Focus on your career.
Rebecca D'Erlanger: My brother is in property, and he and his friends did work experience in insurance and property, But as a teenager, I wanted to be a cricketer. I ended up working in insurance and have recently moved into property, so my advice would be try things out with work experience.
“The demand for housing isn't being met, people will always need a place to live.”
Becky Ellis,
BTR Operations Manager
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Lee RICHARDS
020 7518 2655
EMAIL LEE
Rebecca D'Erlanger
020 7518 2615
EMAIL REBECCA
BECKY ELLIS
020 7758 4916
EMAIL BECKY
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