One concern for landlords which emerged from a recent Rentify survey was the potential negative impact of an increase in institutional investment. But new evidence has emerged this week suggesting that it could be a long while before individual landlords have anything to fear. With returns stagnating, a number of housing associations are re-thinking plans to get involved in the private rented sector (PRS). Affinity Sutton and Yorkshire Housing, among others, claim to have ditched the plans entirely, while Guinness Partnership is reducing the number of PRS homes it will build. L&Q also says its plans will be delayed by increasing land prices.
It is worth asking whether this domestic hesitancy might be (more than) offset by foreign institutional investment, especially given the news that Fizzy’s, the PRS subsidiary of Thames Valley Housing, has received a £200 million investment from the Abu Dhabi-owned company Silver Arrow. This may in fact be the exception rather than the rule. Let’s not forget that George Osborne removed the CGT exemption for foreign owners in the Autumn Statement, creating real concerns about the future of foreign investment in PRS.
All in all, this latest development seems to support the notion that it will be a long time before institutional investment can pose any real threat to private landlords.