A shortage of affordable housing for middle-income professionals in London has prompted the Grosvenor Group Ltd to focus on buying rental properties to meet the demand.
The prominent real estate company, which is owned by the Duke of Westminster’s family, believes that it will receive a better return on investing in rental properties versus luxury properties, reports Bloomberg News. Other real estate development firms and investors are following suit.
Even the UK government is getting into the act, as it has upped its funding for newly built rental homes to 1 billion pounds from 200 million pounds. Mark Preston, the CEO of Grosvenor Group Ltd., summarized his firm’s position on the situation tidily.
Middle income professionals” who typically seek to buy homes are “finding the pricing and availability of finance is much more difficult and are therefore turning to renting,” Preston said. The growth rate in luxury-home values “is probably not sustainable,” he said.