Insurer Prudential to enter UK private home-rental sector
02 April 2013
Uk insurer Prudential plans to enter the UK private home rental sector and was close to finalising a deal to buy over 500 homes from the Berkeley Group.
According to the Financial Times, the insurance giant would use the properties, ''to seed a vast rented property portfolio''.
Property agency, Savills would manage the Berkeley properties, which are reported to be changing hands for about £140 million. The portfolio had formed part of 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.
According to the paper, Prudential would be the first UK institutional investor to take such a step, although money had been pumped into the UK private rental market by a US pension fund.
The budget last month, had been incentivised by the government to get more institutional investment into the sector, which currently was dominated by small private landlords. The 'build to let' movement had gained momentum after it was proposed last summer in the Montague Report.
Sir Adrian Montague outlined ideas for encouraging pension funds and insurers to support house building including complete estates – which would be offered for rent, not sale.
Others insurers said to be interested in entering the private rented sector are Legal & General and Aviva through tie ups with builders.