Is Build to Rent dead?

Hi, I'm Anna Cleiharburn, you're listening to The Return, the podcast that gives you the inside edge on key residential market trends, straight from industry leaders so that you can grow your property career, business or portfolio faster. Build-Trent is dead, long-lived single-family housing. If you're plugged into UK real estate, you will know that regulations, high finance costs, high build costs, they've killed a lot of built-or-entrement development schemes, at least for now. But there are still opportunities out there, and the bookies are clear favourite right now is single-family housing. So today we're going to get into what's changed, where the money is going, and where the opportunities are for serious investors. I'm Anna Cleiharburn, I'm a director at residential investment manager, pinnacle investments, and the author of three residential investing books, as well as host of this podcast, and I'm joined by John Jenner. Hi, Anna, good morning. I'm John German, I'm head of living investments at Vesco. Vesco is a global investment manager, we have about two trillion of global investments across all sectors, and a large exposure to living within our European portfolio. When I talk to investors recently, something that keeps coming up is information overload, especially now that AI is creating so much amazing content. So it's easy to end up drowning in data and second-guessing yourself, being distracted by the next hot thing. So in this series, we do the heavy lifting, and we're covering UK living sectors, so that you can start through the noise, and understand what are the key sectors, strategies, and shifts, and what they mean before we actually get into what's changed though, John. There's a lot of jargon in residential investing. Can you just clear some of that up for us so that everyone's starting on the same page? Sure. I think if you step back and say, you know, you first think about living sectors in the same way as you think about commercial real estate. There are multiple areas of commercial real estate, and in the living space is exactly the same. Built to rents, if you're American multi-family, so apartment-led schemes, single-family housing, so detached, semi-detached housing, you've got other sectors like purpose-built student accommodation, later-living, senior-living, and then affordable housing as well. And I suppose if you throw into that healthcare as well, you see there's a multifaceted bed-led area of space. So built to rent to be clear is typically low rise to high rise apartment-led schemes, typically in urban locations where they can range from 20 units up to 500 units across the United Kingdom. Single-family is kind of what it says. It's a house that's built with a roof on top of it, with your own front door. They typically are in more suburban or rural locations, so around the major contributions across the United Kingdom. Typically, I suppose there's type of thing that you'd see being built by housebuilders rather than developers, which is much more the case in terms of the built to rent component. And really I suppose that's the key differential. Scale is easier to achieve in the built to rent space because you can build high if you want to, or come on to regulations and the issue with that in a little while. Obviously with single-family, we're talking about two-story houses in general terms, and therefore you need the landmass to be able to do that. Just a quick question. What is the difference between a housebuilder and a developer? So typically a housebuilder is like Barclay Homes, Barrett, Bovis, and our Vistory. Companies who basically are building houses typically to sell into the owner-occupier market. Developers typically are individuals or organisations who have secured land. Probably don't build themselves. They employ contractors, so they like Sov, McLaren, or Midgard, to build the real estate form. So they're kind of the intermediary between the investor and the person that she physically building it, whereas the housebuilders will actually undertaking the building themselves. They may have subcontractors, but you would, as the investor, deal with the housebuilder, and in terms of if you're investing with a developer, you as investor would deal with a developer, not a contractor. So you've got a slight differential between the two. Perfect. Okay, great. And the one other thing was the difference between built rent, single-family versus the rest of the residential market. If you're looking at built to rent and single-family, that typically is what we would regard as the institutionally owned and operated element of the living space. You've got the private rented sector as a definition. If you go onto UK government websites, you'll see and the English housing survey. That will classify the private rented sector. So that is all the property that sits within private ownership that is rented out as opposed to the owner-occupier space or the affordable space. The built to rent and single-family components make up a relatively small proportion of the overall private rented sector, private rented sector being about 29% of all households in the United Kingdom based on the last data produced by government. It's a very important nuance between who owns the real estate and how it's operated. Let's talk about the scale and momentum, because if you want to understand where the opportunities are, you need to follow the money. And the capital has been moving. So John, where do you think the institutional money is going in residential and does that match your intuition? If you look at the where institutional capital is going, living as a sector is one that is a high priority and all the surveys that you see coming out. Bed and Sheds are the two sectors that people are really focusing on and keen to deploy into. You've got some institutions who are investing in both single-family and built to rent. NPS, the national pension scheme of Korea, has committed 500 million to M&G to invest into built to rent in the UK and it also committed 500 million to invest with Long Harbor in single-family in the UK. So you've got this interesting situation where you've actually got some investors who still only want to deploy into the built-in space, some who only want to deploy into the single-family space and at the same time some who want to just go living and take advantage of the dynamics of both. So I think what we've seen and we'll look at where money has come through, a slight change when I started working at InvestGA 13 years ago, the focus was on the built to rent space. Now we've seen a gradual move with money still coming into the built to rent space but actually also a greater way to capital certainly in recent years coming into the single-family and I think it'd be interesting just to hear about a few of the numbers that are going to flow through that we've seen from some of the reports we've been looking into. Yes, so 3.17 billion has been invested in UK single-family housing in 2022 and 25, which is huge growth from 544 million in 2022 and that data comes from Savals if anyone wants to check out the detail. Single-family housing now counts for 59% of all built to rent investment if you see single-family housing as a part of built to rent versus just 6% in 2019. So you can really start to see how quickly this has grown both proportionately of the wider institutionally-bath residential for rent segment and also in and of itself. This is a structural shift in order cycle. It's grown much more than proportionately versus the sector and also versus international comparables but single-family housing itself is still a drop in the ocean. Maybe you can outline a bit more about the wider market. And I've referenced the private rented sector in the UK 4.7 million households. We're saying here the single-family component owned by institutions is 19,400 operational. So this pipeline, but actually today operational. So it's a tiny, tiny fraction of that market. If you think back in time, actually institutions used to be huge owners of single-family and private rented sector across the UK. Employers built houses for their staff. The Cabri Village in Borneville is a great example of what used to be the case and they came out of residential institutional investment in the middle 20th century. And what we're starting to see is now the return of institutional capital into that space. It's important in the context of the unsupply of housing and the government's kind of targets to try and increase housing supply. But it will still always in the immediate future be a relatively small percentage of the overall housing market in the UK. Just purely because the function of the time it takes to build and the quantum of capital 4.7 million households. It's trillions of capital deployed. Right now 3.17 billion last year in single-family is a big number, but actually it's not that many units. It's not that big. And it's interesting you mentioned as well, pipeline. I like to look at operational homes because pipeline is all very well, but development has been slowed down so much in recent years that it can also give a bit of a misleading figure. What does pipeline actually mean? So if you're stepping back again and thinking about what in a single-family context, who are you likely to provide as a product, it still is the house builder. And I think what we're seeing now is a lot of households pivoting their strategies. Actually, to say, I'm going to do a third or third or third. It's not a third for land, a third to build and a third profit, which used to be the case. But actually, it's now I'm going to build a third affordable housing. I'm going to build a third for sale. I'm going to build a third for rent. And some are doing it on balance sheet, but the homes I mentioned earlier, creating their own PRS portfolio. Whereas others like the Hill Group are looking to create this melange of a third or third or third. In a way, it allows them to be more reactive in terms of if market dynamics change. But institutional capital will say, well, I'm not worrying about mortgage rates because I'm worrying about my returns. I'm delivering them to my investors. So actually, I think probably one of the reasons why we've seen this big up, taking single family over the last few years, has been the housebuilders pivoting away from their traditional model of for sale into a sale model, but sale model to institutions. And the great thing about dealing with an institution is you typically have one contract. Yeah. So a lot of people sell 100 houses and there's one contract as opposed to 100 homes sold to 100 people with 100 contracts. So a little bit easier to deal with as well. If you also look at how institutional markets have evolved internationally in the United States where investment has a long track record, where actually overweight to residential in our US investments. We've seen actually there are pivoting as well from multi-family built-or-rent, pyarise apartments, low-rise apartments, into single-family homes. And, in Vesca, it's a great example of that. We've actually invested in both multi-family built-or-rent and also single-family homes in the United States, and becoming much more institutionally acceptable. And I think that's where we've seen a lot of non-domestic capital coming into the single-family home space. I think we're going to come on to a little later some of the people who are involved in recent transactions and the level of commitment that they've made to this space. But, you know, it's huge in relative terms. Very helpful, thank you. And the other kind of piece of context there is over 146,700 completed built-or-rent units in the UK, which is a 13% uplift year-on-year, according to the British Property Federation and Savals. But multi-family delivery is down, and co-living is also down. As a result of the trends I mentioned earlier, build costs up, finance costs up, it's really hard to make things stack out in particular for higher-density urban schemes. So, this has made a lot of urban multi-family or build-or-rent schemes less viable. And as a result, single-family seems to be increasing proportionately as part of that sector. If you think about what it takes to build a single-family homes development, you've got the land, you've got the infrastructure in place, the services to service the land in place generally, because quite often these are part of wider, larger regeneration schemes where the infrastructure is already in place. So, what do you left with in the single-family context? The building of a two-story house and putting a roof on it. And that is a relatively quick exercise, and you can phase that. We've invested in a couple of single-family schemes here in the UK, and we've received those on a phase basis. It's a quicker to deploy strategy, and it is also an easier to deploy strategy because in terms of some of the regulations, which we're going to come on to later, you're not captured by the Building Safety Act, because you're not building over 18 metres. I don't think there are many houses over 18 metres in height. There's six stories for those who are not aware of exactly what that might be. Whereas, if you pivot into the build-or-rent space, you're then suddenly caught by the regulations, the fire safety regulations under the Building Safety Act. Also, you have the gateway process at the time to secure planning permissions, takes far longer. I've heard anecdotally it's a third longer than it was to get planning permissions under the old regime, and that's even longer than it was back when I started out my career apparently 35 years ago, being an industry veteran. And other things that are impacting obviously build costs, it is expensive to build high-rise compared to low-rise or, indeed, single-family. There's labour availability. We've seen a constrained supply of labour. We've also seen issues with contractor insolvency. There's been a couple of situations, I mean, where contractors have had to refinance themselves, mid-gards selling down 50% of their business to a Malaysian counterparty. It's important when you're looking at all of these things in realising that it's no longer just a case of, I find a developer, I find a contractor, and I can go and build my build-or-rent product. And also, the back-end, when you built it, you've still got regulations you still have to comply with to actually occupy. And then I think also you mentioned briefly, but that sales cycle with the build-or-rent scheme, you can't start selling until the building's built. Exactly. If you're building a 20-story tower of 300 apartments, it's really difficult and challenging to get that in a phase basis. We've got a co-investment with related agent-type of brain-crossing newtown, where we have 530-odd build-or-rent apartments, but it's in two blocks. So there, we're actually able to secure the first block, 240-odd apartments, and start leasing that, and then the second block after that. That's about the best you can do when you're doing build-or-rent. But when you're looking at, say, the single family, if you have 100 units, you can take 20-odd design or whatever it is. As you say, it's a very important additional consideration, that time to delivery, and then also the time to lease. It takes a long time to lease 250 apartments. It's not just something that happens overnight, and just moving people in and all those constraints as well. The next question is, where is the money actually coming from and who is doing the buying? You've got some investors who are investing in their own right on creating smaller scale schemes. You've also got organizations who have been involved in investing in platforms that have been created. So perhaps one of the best known is Sigma Capital, which is owned by Oxford Properties, a large Canadian pension plan, and Pinebridge Pension Elliott, another investment management house. I think they have about 10,000 units in total and under their management. And there are a few others. More recently, you've seen the sale of PRS REIT, so that was a publicly listed vehicle. So that was actually owned by Invesco, had a 19% share holding in the day in that listed entity. So it was owned by investment managers investing through the stock market. That was actually sold to some local government pension scheme investors, LPPI, and bread-amantristers through the Northern Pool. So you've seen money coming in from organizations like that. Also mentioned the likes of NPS, who have committed the 500 million to the Long Harbor scheme. You've also got developer operators who are out there marketing, so packaged living as another example. They have pipeline that they're looking to deploy. Aviva have also been very active in the space. They've been very active in the single-family space as well. And then there's been a couple of co-mingle funds. So when I mean by co-mingle funds, is an investment manager comes up with an idea. And they say, "Hello, investors. I've got this great idea. We're going to invest in single-family homes." And here are investment criteria. Would you like to give us some capital to deploy in that space? The Long Harbor actually have a single-family homes fund. You also started to see the emergence of funds dedicated into the single-family homespace. If you pivot into the built-to-rent space, really that was started in the UK by the creation of co-mingle funds. So it was really much more co-mingle funds doing it. You also had, there's an investment vehicle called DOR, which owns amongst other things, these fillage down at Stratford. And that is a connection of international and UK investors who've committed into that space. So the built-to-rent market started out with co-mingle funds. And then what we've seen subsequently is investors investing in their own right. So the likes of Starlight, another Canadian investor, investing across the United Kingdom. And other organisations such as that, typically working with partners, legal and general, the UK insurance company, have a co-mingle fund. And so from that perspective, it's a space which is evolved over time. And that started out in probably 2014-2015, when you started to see the first flows of capital coming into the market. And we talked about it's really been in the last two, three years when we've seen the steady flows coming into the single-family space in some greater order. All of it, typically, has been development. What we're starting to see now is really just people are now buying stabilized stock. And that comes onto the points of fiability and developing before development was viable. Whereas now, in some instances, not. So you're able to still invest into the space but you're buying into stabilized stock, which is an important area that we should talk about. So when the segment of the market is first emerging and improving itself, it attracts some riskier capital, basically, and delivers a bit of a higher return. Is that fair, say? Yeah, I think that's right. I think if you're taking some degree of development risk, yes, you are expecting slightly higher returns from developing. But you send what's your ultimate whole period. And when are you going to exit? If you develop and sell, you're going to deliver higher returns. More, certainly, core plus returns was really, I suppose, what people were focusing on back in the day. Whereas now, if you're developing, you're really needing to see higher returns. And that's another reason why it's not viable at the moment. OK, and then over time, as the sector can improve itself, that cost of capital broadly can come down to something that better seems to depend upon. Is that a very oversimplified way of feeling it? I think that's right. There's a bit cry at the moment of where is the core capital. So core capital is typically long-term, low-returning capital that is looking for single-digit returns. So 7, 8, 9. 7, 8, 9. I mean, in that range. Then if you're looking at core plus capital, so you're taking slightly more risk, looking to generate slightly higher returns, probably using slightly higher leverage if leverage is a creative. And there you're looking for double-digit returns, low-teams, and then more opportunistic value-out capital, the high end of the spectrum, highest leverage that you can get, looking to deploy, complete, and exit as quickly as possible. So if typically value-out capital will be looking to be in and out as quickly as possible, core plus slightly longer, core, the longest whole period. I think what we're starting to see in the markets at the moment is there is little or no core capital. So in order for opportunities to transact, certainly in the stabilized space, investors who are selling are having to accept lower prices and higher yield to dispose of the asset. If you're thinking about the components of return, they are a combination of the yield, the rent over the value and rental value growth. Those are two main components. That's how you can drive your performance. The stronger the rental value growth, obviously the better performance. You can potentially have yield compression, so your yield moves from five to four. That's good, by the way. Going down is good in terms of yield. It means a higher value. So if you are a more core plus stroke value-out investor, you'll be saying, "Hey, today I can maybe buy something that two years ago was 4%, and today I can buy it off 5%. I can then push rental value growth. Maybe there's also some extra rental growth I can deliver from this asset. I'll bring in some leverage because actually then it may start to become a creative to my returns. And I can then get my value-out returns today, because also maybe I'm going to believe that in the say three, four-year holds that I'm going to assume, actually I'll make it some yield compression as well, which will add to my overall return criteria. If you're a more core investor, you'll have been saying, actually what I'm really looking to do is to buy it, lease it, take the long-term income, and if values go up great, but actually a combination of I have a yield of five, and I have rental value growth. of three and you have the two together that gets you to eight. That is roughly your IRR that you'll be delivering from that asset. It's a very simple proxy of the way you can think about the returns that an investment will deliver for you. If you can buy off of five and you're getting rental growth of three but you're then saying I'm also going to get some yield compression from five to four that will juice up your returns and then if you add in some leverage as well that will get you to higher levels of return. So that's really where the money is at the moment. Just that one point that you made about debt being a creative. Anyone who works in our sector will know what that means but just for anyone who doesn't. So when you take out debt you have a combination of two things. You have the margin which the nice bank manager will lend you the money and roughly speaking stabilised investments at the moment in the United Kingdom. A sensible loan to values sort of 40 to 50% loan to values. You're probably for a good quality stabilised built-to-rent asset and single family would be similar. You're somewhere between 150 and 160 so 1.5 to 1.6% is your margin and then you have something called Sonya and Sonya the new libel that is basically the additional margin that the bank's charge on top of the one and a half to 1.6% as your total all-in-cost of debt because that's the margin that the bank of England stipulates and so if Sonya today is running at 4 and your cost of debt is 1.5 your total cost of debt is 5.5 so you need a income yield of over 5.5% to make your debt positively accreted your returns. So if your debt costs you 5.5 and your yield is only 5 then your income returns go down and therefore the debt is not accretive to your returns. I suppose a couple of notable transactions and we're talking about is built-to-rent debt. Earlier this month we saw that Apollo had bought out gate houses, single-family homes, platform massive for these single-family homes. Apollo being more opportunistic capital so you know really interesting that they've come in made a big statement they're looking to raise a fund to deploy into into UK housing and then pension insurance corporation they recently bought a building called Eb and Flow in Reading which is a built-to-rent transaction one of the largest built-to-rent transactions for quite some time. So you know we're seeing capital coming in in both spaces. I think it's important not to just go all this quarter it's more built-to-rent and therefore build-trends back in favour and single-family is out of favour. I think you need to look over that 12 month period to see how things have evolved so for me the jury will be out until the end of this year as to whether single-family is still going to be top of the pops or whether actually build rent is going to make a comeback. Yeah top of the pops you take me back there really interestingly say because as you said news comes out every day it's easy to get distracted but because these transactions are each quite large one transaction can throw the data off for a quarter but also transactions are very slow at the moment so something that was agreed a year ago may still be ticking along you know. Yeah and you know we sold an asset last year to Graystar we were very happy that it took us six months to get that across the line. So you know is complicated there's a lot of due diligence whether you're buying developments or whether you're buying standing investments and I think what's easier perhaps and one of the reasons why people see single-family as an easier investment asset class is it's a lot less complicated back to my point about building a house. Yeah it's formulaic it's easy you know you've got some mainstream players like Lloyd's Bank through their platform investing into the single-family home space they don't want to do build a rent they only want to do single-family they like that as a space they see it. I suppose it's more aligned with maybe their other core business which is providing money for people either as a Lloyd's Bank account holder or as someone taking out a mortgage. Then you've seen more noticeably a situation where a business has decided to come into the built-in rent space and actually has then decided to exit in this case I'm talking about John Lewis. It could have been the most perfect marriage you know John Lewis had sites because they had supermarkets across their chain and maybe they could redevelop those you don't beat the space above the supermarket but you can build things on top of it. They also have furniture they provide all the things that you might need to get out of property and you know so it could have been the marriage made in heaven. Well and also there are consumer business and housing as a consumer product. Exactly that. So it's interesting that they've decided to pivot away from that they did announce that it came out again yesterday 22 million loss off the back of that initiative but I don't think it means that actually the built-in rent market is in a downward spiral I just think it's a business plan that was put into effect by one organization hasn't quite come to fruition they've decided to move on made that commercial decision. But there are other people like pick investing into into epic flow. Regulation is part of the conversation that either puts people off or it gets crossed over or we end up in a debate about what the government should do which we could go on for a while on that but we won't do that because actually in a way regulation could be where the opportunity is if you know to read it. So regulation makes things harder and more expensive but in a way it also creates a moat in investors who are willing and able to operate professionally and at scale that moat can work in your favor. So a couple of key regulatory changes which we can talk in a bit more detail about. I think the first one is you referred back to 2015 earlier about that time when the emergency built rent but 2015 the other thing that happened was the finance act and section 24 of that changed the game for private landlords who are responsible for most of that 4.7 million private rental sector that you referred to earlier and what it did was it changed mortgage interest relief which started to come in from 2017 so from there on it's going to downward trajectory for the returns of private landlords and many of them as a result have stopped wanting to be private landlords and that was a deliberate change of government wanted a more professional rental sector so there's a good intention there but the net effect is you know this doesn't make as much sense for individuals it makes more sense for institutions that we've just been talking about. The second big one is the Building Safety Act which maybe you can talk in a bit more detail about. The Building Safety Act is a result of the horrendous and terrible disaster at Grenville but it has created a series of steps that are now required for any property over 18 meters in height six storage and zyrefer to earlier and the fire regulations and the design associated with that so there's a Building Safety Regulator who is empowered under the Building Safety Act and any new building now over 18 meters in height has to go through a planning process where there are gateway stages as part of the design process where you get to a gateway and at that point the Building Safety Regulator signs off the design of that building and says yes this is safe and fit for purpose if he doesn't sign it off then you can't proceed to the next stage. In addition to that you also have to have two stair calls created in the building as opposed to one which is a typical case for many buildings built before the Building Safety Act was brought in so those are supposed to key components of our legislation. And so effectively adds a lot of cost and complexity to multi-family development and that is a big one of structural reasons why it's become a lot harder to do. And time. The next draft of changes is also more rent-a-focus, the Rent-a-Zerike fact. So the headline change on this one is the abolition of section 21 no-fold evictions. That has been quite a big shift for the private rental sector and for professional built rent and single-family housing operators it's argued that the practical impact is a bit more limited because they're typically focused on longer tendencies, lower chance, you know many of the reasons why you might want to issue a no fault eviction. Someone who is deliberately renting a building out wouldn't want. So in general the institutionally-backed sector is more aligned with that regulation. There is a bit more friction around if you do need to get possession for some reason or another but I mean ultimately this small landlord faced the greatest pressure on this it creates a moat for institutions. It certainly creates a moat. I think one other thing though that the Rent-a-Zerike does bring in which affects every landlord is the right of tenant to appeal against the rent that had been proposed by the landlord. There is a system that has been put in place where there's an embezzlement who we listen to appeals. I've heard that there's going to be a charge now associated with that so that people can't just go on to chat to you P.T. or one of those other AI tools and say please put in a claim for me. But I think that's the big area where there'll be a learning process and landlords will see what will happen. But for sure you as an institutional owner you want your tenant to stay as long as possible because then they're paying rent to give you income which you can then give out your investors. Final regulatory change on this one is coming in now as making tax digital and that affects private landlords, it affects the individual landlord to own properties in their own name. The net effect of this is it's pushing small and landlord out which effectively accelerates institutionalisation. It's important to remember that this is a sector you want to make it as accessible to institutions as possible and one of the big cries is stop introducing new legislation. So I think that's something very clear that all landlords whether they're institutional or non-institutional or will we continue to say to government you've done what you've done we've got where we've got to. We now can play a canister playing field and we want to get on with it. Yeah absolutely. So the winners are those who can operate at scale within regulation and use it as a barrier to entry rather than a reason to stay out. Let's bring it together. What does all of this mean for investors making decisions right now and it gets on a practical level. If you're a serious investor looking at this market I think the first piece is around where to play. The emphasis is on single family housing not blocks of flats so necessarily the best and easiest locations would be suburban and scalable locations where land values support that viability and there's genuine rental demand from families. In particular maybe locations where there's good school catchments or transport links or limited competing supply. How about what to avoid I think. Stabilized stock is an area where there's been much more activity. Right now, you can buy Stabilized stock below replacement value. So actually overpaying for Stabilized stock, I think is an important thing to avoid. Also, don't rely on your compression. If I'm going to my investment committee, I know if I put in your compression, I'm going to get lots of questions to why I think this appropriate. The other thing I think is don't assume all locations for single-foundable work. The cost of a brick is the same wherever you use that brick, but actually the cost of the land is the bit that will make the difference. So some locations, the land values will be too high to make a single-foundable home investment viable. I think the final thing is this is all operational real estate, and making sure that you get a good operating partner is key. So I suppose what to avoid, bad operating partners. Yeah, great. So what's working now, I think you can say we're still seeing forward funding happening. So forward funding is where investor agrees to buy a piece of real estate for an agreed price, and it's delivered to them, and you either pay money on the drip as the building's constructed, or you just pay deposit and the balance on completion. We're seeing partnership with housebuilders, so they're becoming increasingly popular. We talked about a few earlier in our discussion. Aggregation strategies, scale matters, scales important, you can drive economies of scale if you have a big scale portfolio. So seeing who is going to create these portfolios of scale, PRS REIT will continue to grow under its new ownership. Sigma will continue to grow, Gaithouse will continue to grow. I think also, we're starting to see as new capital coming into the market. Local government pension schemes as a group are the seventh largest pension group in the world if you put them all together. Board to coast recently made an investment in Cambridge. So you're starting to see these investors coming into the market. So I think we're seeing an evolution into the way the market's working. I think not all forward funding works, and we've talked about build serendipity in challenging at the moment. Generally speaking, the outlook is positive for both these sectors in the United Kingdom at the moment. I think it's important say United Kingdom. And what will be really interesting is to see where everything comes out on in terms of that final balance. Will it be a 50/50 split between single family and build to rent? Or will single family continue to be that host of child that everyone wants to go into and continues to be the strongest sector compared to the built to rent? Great. So this is not really about single family housing versus build to rent. It's about how capital is reshaping UK housing. The investors who understand that are the ones who best face to act on it. So each month we'll go deep on a sector strategy or shift so that you can spend less time filtering noise and more time acting on the signal. If this was useful to you, please tell someone. And if you have questions or topics you want covered, we want to hear from you. You can set us text. There will be a link in the show notes. Or you can find us on LinkedIn, Anna Claire Harper and John Jones. There we go. We'll be back next month with another deep dive. Until then. Bye. Bye. Thanks for listening to The Return. If this episode has sparked an idea or helped you out, I'd really appreciate you recommending it to a friend in residential. Let's connect to on LinkedIn. Or you can text me the links around the show notes. Get in touch and let me know if there's a guest or topic or challenge you want covered. Until next time, bye for now.