Betting big on buy-to-let: Prudential moves in to rented housing buying 500 homes for 105m deal



The Prudential’s property arm has bought more than 500 homes in a £105.4m deal that could open the floodgates for big City institutions to invest in private rented housing.



Prupim, the property division of M&G, the Prudential’s asset management subsidiary, has exchanged contracts to buy the portfolio of 534 homes in London and the south east from housebuilder Berkeley Group.



The rental houses are due to be completed in June. Their building was partly funded by the Homes and Communities Agency under a scheme to encourage pension funds and insurance companies to invest in the UK housing sector.



Prudent in property: More people are renting than buying now, making houses a more attractive investment

The Government is keen to entice big investors into the market due to the chronic shortage of affordable homes. Institutions were in the past big investors in UK housing.



In the post-war period, however, they have preferred to invest in shares and bonds as these are easier to trade and because property involves high running costs.

However, Prupim and others believes the tide has now turned as more people are renting instead of buying.



Savills, the upmarket estate agent, will take on the day-to-day management of the properties and Berkeley will be a minority investor.



Prupim has more than £16bn of assets under management in 740 properties. Its investments include the Bluewater shopping centre and the Oxford Science Park.

