Certainty is by its own definition the thing that differentiates between good and bad in most things, but in the Property Investment world it quite literally has a value. When the RICS introduced the Material Uncertainty Clause right at the start of the Pandemic it caused a ripple right across the investment market. Basically, it threw MUC at all the Project Valuations in play looking for funding. The consequence was a collective pressing of the Pause button. Money stopped flowing!

In the subsequent months something unpredictable happened in the  Multifamily (US terminology) and Build to Rent (European terminology) sector. People paid their rents. They did not just pay them, they paid their arrears, and they extended their leases. Okay, the latter was probably a necessity given you could not go and visit a prospective property to rent. However, the rest was borne out from a basic need for “certainty” in what was the world’s most uncertain time. People need a place to live, and they paid their rent to ensure that was not something else they had to worry about.

LIV Consult parent company Cortland and the UK management business LIV Group reported that they collected near normal levels of rent in March, April, May, June and July and given the scale of this collection in the US in particular (58,349 units), it proved that Multifamily/BTR is a resilient Asset Class. Couple this with a high number of positives from a customer care perspective of living in a professionally managed ‘community’ (not the focus of this article) and investors are beginning to press Play again and projects are moving forward.

Investors in any sector love certainty and where they encounter uncertainty they add ‘risk pricing’ to account for it. Where this risk price becomes problematic is when it tips a viable project into the unviable bucket bringing the Sword of Damocles down on Developer’s heads.

The good news for the Build to Rent Sector in Europe, particularly in the UK and Ireland, was that RICS lifted the MU Clause from both BTR and Logistics, or as the industry has christened this “Beds and Sheds”. I was in discussion with a well-known National Family Owned Contractor (who also Invests) and they told me that their new Business Plan was focussed on, Beds and Sheds! Not just ‘any’ beds I hasten to add, but BTR beds. If you have a residential for sale project to fund, you might want to scratch off the ‘sale’ and replace it with ‘rent’. If it says ‘hotel’ then hopefully you have a Plan B.

The consequence of all of this is not the opening of the flood gates for inward investment into BTR, but more of a re-focussing of funding towards it. In the months preceding C19 we saw a significant increase in the interest of American Institutional and Private Capital into the UK and Ireland market because the market was young and the metrics were positive. If anything, some of these metrics have moved towards BTR during the pandemic.