0:01 AM, 22nd June 2023, About 8 months ago 5
Hello, I’m extremely surprised it has taken so very long for commentators to only now wake up to the fact that an ever-increasing number of major corporate investors, pension funds, American and other private equity companies have and are targeting the UK BTL market.
It was several years ago the FT published an article reporting Goldman Sachs was entering the UK BTL market. So why the surprise now?
Where Goldman goes others soon follow!
Compared to the small amateur UK BTL landlord large incorporated companies have a massive advantage in terms of borrowing power, leverage, tax subsidies, ability to charge interest against profits, dividend payments and above all the ability to fund the construction of new buildings for tenants and/or convert existing office blocks. Unlike the small landlord, paying for the installation or upgrading necessary to meet EPC standards will be no problem for major landlords.
We have been seeing it for years in the student rental sector with highly leveraged long-term investors such as Unite operating easily, profitably and successfully across the UK. The student model has moved to the PRS and (with the exception of the FT) commentators are just waking up to the fact.
Will this prove to be the final nail in the small BTL investors’ coffin?
Thanks for reading,
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