Source

Rupert Steiner, Daily Mail
28 April 2009, 7:59am

Legal & General has held talks with the Government about investing in the residential housing sector.

Buy-to-let: Legal & General may invest in residential housing

Pension funds are entering the buy-to-let market to take advantage of comparatively high rental incomes following a spike in demand for accommodation.

The insurance giant held discussions with the Government-backed Homes and Communities Agency within the last month about so called ‘build-to-let’ opportunities and partnerships to develop homes from scratch.

Buy-to-let has previously been the preserve of small time entrepreneurs, but institutions are now seeking to muscle in.

Pension funds in the past have invested to take advantage of rocketing house price values, rather than relatively modest returns from rentals.

But property values have plunged and rental demand has soared along with rental returns, known as yields.

‘It is clear pension funds and other institutions are looking at purchasing residential portfolios,’ says Jon Neale, head of development research at Knight Frank.

‘There is a bigger market for rental housing than in the past.’

For all your rental requirements, look no further than www.rentright.co.uk