Giant insurer Pru to enter buy-to-let market
The Prudential is to enter the UK private rented sector and is close to finalising a deal to buy over 500 homes from the Berkeley Group.
The insurance giant, says the Financial Times, will use the properties “to seed a vast rented property portfolio”.
Savills will manage the Berkeley properties, which are said to be changing hands for about £140m. The portfolio had been the rental business that Berkeley established with the Homes and Community Agency in 2010.
All the properties are believed to be in London and the South-East.
The FT says the Prudential will be the first UK institutional investor to make such a move, although a US pension fund has pumped money into the UK private rental market.
The Government used last month’s Budget to incentivise more institutional investment into the sector, which is currently the domain of small private landlords. The ‘build to let’ movement has rapidly gained momentum since first being proposed last summer in the Montague Report.
Sir Adrian Montague outlined ideas to encourage pension funds and insurers to back the development of houses – including complete estates – which would be for rent, not sale.
Both Legal & General and Aviva are also said to be looking at entering the private rented sector, via tie-ups with builders.