Profitable buy to let is over and amateur landlords ought to get out while they can, according to the boss of a leading build-to-rent firm.
Helen Gordon, chief executive of Grainger, the UK’s biggest private rented home business, claims amateur landlords would do better investing in the company’s shares.
In an interview with The Times, she argued that private landlords could not compete with property standards and facilities offered by build to rent corporations.
One of Grainger’s latest developments, at Clipper Quay, Manchester, boasts superfast wi-fi, a gym, concierge and a private lounge and gardens for renters.
“Instead of people investing in buy-to-let properties, they should invest in a Grainger share. They would get 50% of our net rental income paid out as dividends,” she said.
“I think there are some big changes coming, which will make many people reconsider.
“Are landlords going to be able to compete with the big build-to-rent operators for amenities or quality? It’s very unlikely.
“Individual landlords will increasingly find it hard.
“In the past, people used to have awful student accommodation and then leave university and buy their own home.
“Today people often have fantastic quality student accommodation, full of amenities, and end up living somewhere really grotty. Why should they?”
Grainger owns and manages a portfolio of more than 8,000 homes as Britain’s largest private corporate landlord, investing mainly in London, Manchester, Bristol, Birmingham and Leeds.
Building is underway on 12 sites, with four due to complete in 2019.
The company has a market capitalisation of £1.54 billion, with shares trading at around £253 each.
On average, voids are less than 2.5% and tenants stay in their rented homes for 32 months.
Rental income increased by 3.4% in the first four trading months, ending February 2019.