Paragon Bank Set to Invest in the Build to Rent Sector

In emerging BTR news, a UK giant in the banking sector, Paragon Bank, is set to burgeon into the build to rent sector and will contribute £35 million to the support of this project.

The project is seen as the catalyst for establishing BTR properties all across already well-established locations in the UK, where student housing is already booming. This project, as emerging in build to rent news across the world, will include property acquisition, development of said properties and letting of fully functional BTR schemes. This move is set to greatly help developers dipping their toes into the shallow waters of the BTR housing model, as the development proposition proposed by Paragon will let them retain the BTR scheme after the completion of the project.

According to data revealed by Savills recently in popular BTR news, the current stock of built-to-rent homes in the UK stands at 88,100 homes, with an additional 53,500 homes undergoing construction. The amount of capital invested in the April-to-June quarter stood at $1.36 billion, a second quarter record. Neal Moy of Paragon Development Finance says, “The BTR market is a natural extension of our proposition to support experienced residential developers. The sector has continued to enjoy strong growth and complements the buy-to-let market in offering a good quality home in the private rented sector.”

Student housing news, as revealed by Savills, also showcased that there are an additional 111,800 homes in the pipeline undergoing some planning before they are constructed. “We are offering something different to the typical BTR funding model where the developer holds most of the development risk but has limited upside benefit.”As reported by Amber last month, buy to lets in the UK face tough times since issues such as erosion of tax reliefs, ever-growing inflation, and cheap mortgage debt are growing pains for buy-to-rent landlords who are already minor stakeholders in the overall UK residential market. Paragon’s initiative comes at an opportune time as the crunch period felt by BTR managers all over the UK seems to be washing away, being replaced by a newfound focus on the sector’s development with the help of the private and public sectors.