Real estate businesses believe private equity will be the main source of investment over the next 12 months, according to RSM UK’s Real Estate 360 survey.
Research commissioned by audit, tax and consulting firm RSM UK shows that 42% of all responses believe that private equity will be the most readily available source of funding in the next 12 months, followed by high street banks (37%) and foreign investors (32%).
In addition, 43% of all businesses surveyed expect private rented sector and residential to see the most investment growth; followed by student housing at 24%, up from 19% last year.
Scotland also moved into the top three behind London and the South East as the UK regions expected to attract the most residential property investment over the next three years.
Jasper Van Heesch, director and senior analyst for private capital at RSM UK, said: “With the chronic lack of housing supply combined with rising real incomes, private equity related real estate funds, such as Blackstone’s, are being drawn to the UK housing market as it presents a viable opportunity, particularly in the buy-to-rent market. With a recurring revenue profile and reliable demand, it builds a case investors can rely on.”
Stacy Eden, head of real estate and construction at RSM UK, added: “When you combine this with the ongoing economic uncertainty, investment is driven back to ‘safe markets’ such as London and the South East which typically drive higher rental incomes. Interestingly the thriving rental market in key Scottish cities, such as Edinburgh and Glasgow, is also presenting a compelling investment opportunity.”