UK’s Blend Network Shares Property Development Updates, Comments on Build to Rent Market

UK’s Blend Network, a specialist development finance lender, notes that their commitment is to help investors “access great risk/return lending opportunities, while at the same time supporting experienced SME property developers and small construction companies unlock funding to build more homes.”

Blend Network‘s experienced lending team, “formed of property and finance experts with decades of experience in the development finance market, are responsible for ensuring that all the loans [they] bring to investors meet all the highest criteria and offer great risk/return.”

Blend Network wrote in a blog post that we should be aware that “your capital is at risk.”

They are particularly proud when the development projects “are completed and [they] are able to show off the fantastic job done by property developers [they] have supported.”

So, on this occasion, they wanted to show you the homes “developed by two of the experienced developers [they] have recently backed.”

The first project “consisted of the conversion of a site into four 4-bed houses in Middleton, Norfolk.” The second project “consisted of the conversion of a former barn into a four-bedroom house and garage in Bentfield Mill Barn, Stansted.”

For more details on this update, check here.

In another update, Blend Network noted that the Build to Rent (BTR), an emerging market within the private rented sector (PRS), is “a relatively new concept: it offers purpose-built professionally managed residential development schemes designed with the sole intention of appealing to the rental market, as opposed to long-term ownership.”

In most cases, these schemes usually “offer longer tenancy terms and are typically built and managed by institutional investors and property companies.”

Originating in the US, the concept was first introduced in the UK in 2012 “as a solution to the rise in renting and to the private rental sector’s traditional poor reputation and low quality.”

Since then, Blend Network notes that we have witnessed “a significant and steady growth in this segment of the market.”

As of last September, there were 83,000 homes “in the BTR pipeline in London alone, as growing numbers of people seek quality, well-managed rental housing at affordable prices.”

This trend is not surprising “since BTR schemes offer both long-term returns for the investor, and generally higher security and overall quality of rental accommodation for the tenant.”

Research published by Knight Frank last year “shows investments in the BTR market hit £2.35 billion in the first half of 2021 – over £1.27 billion in Q1 and an additional £1.08 billion in Q2.”

This represents “an 80% increase in investment volumes compared with at same period in 2020 and is a figure that is expected to be greatly surpassed this year.”

Furthermore, the BTR market has “shown surprising resilience throughout the pandemic and holds potential to meet resident needs for home-working environments and outdoor space.”

With the shift in priorities following the pandemic, the pressure to meet housing demand and with ongoing soaring house prices, “demand for BRT has been understandably on the rise.”

Another very interesting trend within the BTR market growth “is its strong regional spread.”

According to Knight Frank, some 70% of the funds committed to BTR in the first half of last year “were for schemes outside of London, reflecting investor confidence in the fundamentals which underpin those regional markets, as well as an increase in the number of development opportunities being brought forward outside London.”

Knight Frank “estimated by the middle of last year that 58% of all pipeline schemes of 75 units or more (either under construction or with planning) will be delivered in regional markets.”

This trend is both interesting and very much “aligned with our view of the UK regional market.”

At Blend, they have been and continue “to fund development schemes across the regions and have very supportive views on markets such as Manchester and Birmingham, especially amid the government’s Levelling-Up agenda.”

Blend is “an active development finance and bridging lender across the UK regions.”

They support SME property developers and small construction companies who are “building residential and mixed-use schemes across the UK, with a particular focus on innovative, energy-efficient, and ESG-compliant schemes.”

Investment in BTR very much “aligns with their short- and long-term view of the market.”

Therefore, they actively support developers who are “active in that market.”

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