Colliers’ living specialists say the UK’s rental markets are entering a new phase, shaped by regulatory change, affordability pressures and the rise of suburban and regional housing. The agency recently restructured its teams to bring development advisory, funding and living sectors under one umbrella.

Jon Bull-Diamond has been appointed head of the residential and living group, having joined Colliers from Homes England in January 2023. The firm has also appointed Alanna Peach as sole head of the living capital markets team, following co-head George Adams’ departure in June.

On the restructure of the team, head of UK residential Andrew White said: “We’ve always worked closely, but aligning development advisory, funding and living sectors properly means we can cover the whole life cycle for clients. It’s streamlining what we already did and positioning us to grow.”

A pause in development

For White, the main sticking points for the residential sector stem from policy shifts. “From a development side, the biggest challenges right now are things like gateways and the new Building Safety Regulator requirements,” he said. “The industry supports the policies, but not always how they’ve been brought in – especially with the lack of funding to make them workable.”

Those hurdles are contributing to a move away from the capital’s urban towers, White added. “We’ve pivoted away from very London- and urban-centric schemes into more suburban and regional housing,” he said. “There’s still huge appetite from developers for housing, and that links closely with the single-family rental market, which is growing fast.”

Peach said regulation and funding constraints have forced developers and investors to explore new models.

“At the moment there’s been a lot of regulatory change that has impacted our markets,” she added. “That’s led to a pause in development, especially because funding has been particularly difficult over the last couple of years. We’ve been working on quasi-funding structures – more like JVs or promote structures – to push payments further back in the life of a scheme and still make it stack from an investment perspective.”

But she pointed to a growing investor appetite for stabilised assets, alongside opportunities to reposition tired stock.

“There’s real demand for stabilised assets, especially across co-living, build-to-rent and student,” she added. “What we’re able to do is look cross-sector, which is our USP as a team. For example, if a student block needs recladding but the market there is oversupplied, we might reposition it as co-living. That flexibility has become really valuable.”

More optimism

White and Peach agreed the middle of the rental market has been overlooked – a space now ripe for growth. White said: “BTR has been slow to deliver compared with PBSA, but demand is through the roof. Every core buyer is chasing stock, it’s just not stacking up in the same way because yields are lower than in student.”

“What’s interesting now,” Peach added, “is more mid-market, affordable product is starting to come forward, not just the high-end towers we’ve seen in recent years. The market has had a lot of premium and affordable housing, but the middle product has been forgotten. Now, with new regulations and gateways, we’re seeing more demand for lower-rise buildings in outer London or regional locations, with fewer amenities, to hit that affordability point.”

The Colliers team also sees renewed appetite for thinking big. “Large masterplans are back on the agenda,” White said. “Planning is in a better place than it has been for years, so there’s more appetite to take on bigger sites. It’s always been attractive to create new neighbourhoods, but the planning environment had slowed that down. Now we’re seeing more optimism.”

For Peach, the bigger picture is about serving actual demand. “We’ve been doing a lot of work on affordability-led advice for clients,” she said. “What price points are realistic and sensible? Where is the demand? That’s where we need to focus – not just creating more top-end stock, but the homes that people really want and can afford.”

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