Prior to the financial crises banks and building societies lent heavily to private landlords (mostly individuals), once the buy-to-let mortgage was introduced, but institutional investment, by pension and insurance funds for example, has been virtually absent from the private rental sector (PRS) here in the UK.

It appears that this is going to change and at the recent British Property Federation (BPF) Residential Conference, held at the end of February, Housing Minister Mark Prisk clearly confirmed Government's support for the build to let sector. Prisk told attendees that Government's flagship build to let policy - which provides a £10bn debt guarantee plus £200m in equity finance for house builders and developers - will encourage a wider range of investors to build homes solely for private rent and not for resale.

With Government measures aimed at boosting the construction of homes specifically for private rent, and the first build to let deals being announced, 2013 could be a breakthrough year for the embryonic build to let sector. But how much of a threat might the sector pose to private UK landlords? Will it lead to oversupply in targeted areas followed by falling rent levels? Also, will the recent change in planning, regarding conversion of office space to residential, allow the sector to move quickly and easily into central urban locations?

The BPF was part of a nine-strong industry panel that advised Government last summer as to why institutions did not currently invest in UK rented housing, led by public-private partnership expert Sir Adrian Montague.