We Look At The Growing Residential Market in 2016

As we look forward to 2016, it will be interesting to see if the predicted developments made last year with respect to the housing market start to take form.

It was an interesting close to 2015 for us, with two major residential asset class conferences being held in London within a week of each other and we were fortunate to attend both.  First up was the Care Home Conference. Here we saw much dialogue surrounding the signs of a growing market within the sector. Despite this, there remains a long way to go before it catches up with the rest of Europe and USA; their share is five times greater than the UK current market and also with an increasing ageing population likely to increase by 50% in the care age sector bracket there is a growing market.

Following this was the Student Accommodation Conference which also saw discussions around the signs of growth and confidence in the market with numerous large scale portfolio acquisitions demonstrating the longevity and strength of the asset class.  During the event, the strong themes which we see emerging about brand and level of service was highlighted, as well as long term investors and predictions of improving yields to come.

It would seem that these markets focus on the identity that they offer and the service level that is associated with it, something that is becoming more evident in the student accommodation sector in particular.  Taking into account the expected growth of the PRS and build-to-rent sector, there may be a gap in the market to continue this service level accommodation, resulting in it being not such an unusual mode of living.  Will one day the choice of accommodation be more focused on the service level that you expect/can afford based initially on your student living experience, and then as a young adult in a serviced and rented property?  Will you be able to sign up to an operator who provides through-life accommodation depending on your requirements? This could even cover hotels, both domestic and abroad.  Maybe early year rental covers end-of-life accommodation?

With rental accommodation offering strengthening yields, it will be an interesting to see how this landscape develops to possibly fill a gap in the underachieving housing for sale market as we move through 2016 and beyond.