Search Here

In anticipation of a housing shortage and the prospect of higher returns, some 30 institutions plan to invest $11 billion on rental homes in Britain.

According to CBRE Group, a property consultant, the prospect of a 4 percent-plus returns on property have encouraged financial institutions including British pension funds and American private equity firms to develop or buy residential property to let.

Data from Investment Property Databank revealed that in 2012, a private rented housing in UK generated an 8.9 percent return as compared to the 2.7 return from warehouses, offices or shops.

In addition, investors were encouraged with the British government's pledge to increase funding for developers of rental homes to 1 billion pounds.

A housing shortage is in sight with less than half of the required houses being constructed for Britain's growing population. In addition, mortgage requirements such as the 20 percent minimum deposit have made it more difficult for potential buyers to own a private home.

Government data showed that an estimated 3.8 million households lived in private rented accommodation in 2011/12, the highest level since the 1990s.