With the recent appointment of Fred Done’s PRS Trinity Scheme and the forecast of Manchester’s population exceeding 600,000 by 2030 creating a need to provide 55,000 homes over the next 15 years, urbanbubble MD, Michael Howard talks about PRS and how residential property management will make or break PRS schemes in the North West:
- There is a low supply but evidently a high demand in PRS developments in Manchester and Salford. Investors need to be approached and shown that the figures add up.
- PRS is all about scale. To deliver a 24 hour site based service that exceeds customers’ expectations, a development would need an average of around 200+ homes.
- The Build to Rent market (a.k.a PRS schemes) typically aim for a 70-80% net operating income (not including set finance and interest).
- Rent has been increasing year-on-year due to a shortage of homes. Introducing PRS schemes will create 2 or 3 tiers of rental prices based on location, age and onsite services & amenities making the city more affordable.
- When the first significant wave of PRS developments hit Manchester and Salford, we believe they will be highly sought after with many people relocating from their current city centre apartment due to poor management.
- Due to fierce competition that may vacate older properties, new pricing tiers will be introduced and encourage leaseholders to invest in their blocks. This will work to the city’s advantage as it will improve quality and standards across developments and provide more affordable rental properties.
Typical market rent for PRS in Manchester and Salford: 2 bed apartment (location dependant): £900-£1,250p/m approx. However, we’d not be surprised if premium appointed schemes were rented for £1,300-£1,400p/m.
At urbanbubble we’ve been working very hard over the past few years to understand the specific challenges and requirements involved in managing PRS schemes. Essentially, there are two customers; the asset owner and the residents, and it’s how we look after them and their homes which will be the makings of a successful PRS development.
urbanbubble complete a comprehensive financial model providing detailed rental projections, operational cost and net operating income for the scheme for the next twelve years.
Get in touch to find out more or to request our ‘Managing Your Community’ Prospectus.