PBSA and BTR sectors tuning into investor demand for completed schemes
- Completed BTR schemes to account for 30% of investment by 2029-2033 (Savills)
- Investment in PBSA up from £1.1 billion to £2.45 billion between H1 2023 and H1 2024 (Knight Frank)
- Guaranteed rent and faster ID checking at heart of operational efficiencies for completed schemes (Housing Hand)
The Purpose-Built Student Accommodation (PBSA) and Build to Rent (BTR) sectors are increasingly tuning into investor demand for completed schemes, according to UK rental guarantor service Housing Hand. Managing Director Graham Hayward explains:
“The PBSA and BTR model is proven. Appetite from renters for high-quality homes with on-site amenities is strong and sustained, while development and operational costs leave scope for healthy profits. It’s a model that suits all parties, from investors through to end customers – the students and working professionals who live in these homes. Now, it’s time to build at scale to meet investor demand for completed schemes. That includes getting the payment of rent arrears in better order and aligned to leading practice.”
In the PBSA sector, investor appetite has accelerated significantly over the past year. Knight Frank’s H1 2024 UK Student Housing Market Update details investment of £2.45 billion in H1 2024, up from £1.1 billion in H1 2023. Q2 2024 alone attracted £1.7 billion of investment in PBSA – over 50% more than the first six months of 2023.
Build to Rent investors, meanwhile, are showing a growing appetite for fully operational schemes. Savills reports that around 20% of investment in BTR between 2018 and 2023 was in fully let, operational stock. The firm expects that figure to increase to 25% between 2024 and 2028 and to 30% during the four years to 2033.
Key to attracting investment and delivering healthy returns is stability. With growing appetite for fully operational schemes, it’s also important for operators to lease up and achieve that stability as fast as possible.
This is where Housing Hand is supporting PBSA and BTR providers. The firm providers rental guarantor services, an insurance-backed product that means rent continues to be paid to the operator, even if the tenant defaults. The service underpins reliable income-forecasting for PBSA and BTR schemes, while cutting out the time-consuming losses traditionally resulting from managing defaults and chasing tenants for late payments. The cost of rent arrears collection normally exceeds the cost of a quality and compliant guarantee.
“We provide cost-effective operational efficiencies,” explains Housing Hand’s Head of Sales and Marketing, James Maguire. “Debt recovery companies charge 10-15% of the debt for their services and can take months to deliver. Using our efficiency model instead, PBSA and BTR operators simply email Housing Hand when a renter defaults, trusting in our record of 100% payout on all valid claims.”
Housing Hand’s identity checking services are also supporting the firms PBSA and BTR clients. It can take as little as 35 seconds for Housing Hand to complete ID checks, while still meeting stringent regulatory requirements, supporting a faster, smoother leasing experience for all parties.
“Delivering fully operational PBSA and BTR schemes that appeal to investors means ensuring that every element of the scheme runs efficiently,” concludes Housing Hand MD Graham Hayward. “Ensuring that rental income flows as it should, and that any void properties can be let as fast as possible, are key to assuring investors that a scheme is operating smoothly.”
