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With more young people being priced out of the property sector, particularly if they work in any of the major cities including London, and the South East of England, could this be the year in which even more investors put their money into the build-to-let sector?

A Financial Times Report indicates that institutional investors could put as much as £50 billion into new homes by 2020. The shift towards investors such as pension fund holders or insurance companies looking to put their money into property is largely down to two reasons.

Firstly, more young people want to live and work in cities where they cannot afford to actually buy properties. Secondly Government changes and increased taxes have put restraints on individual and small landlords wishing to buy-to-rent.

So it is a lucrative market and with property prices continuing to rise in the UK, it is a logical space into which large-scale investors can put their money.

The FT uses the example of Europe’s largest pension fund asset manager APG which is backing a 44-storey, build-to-rent building in the Elephant & Castle district in London.

At the moment the build-to-let sector is fairly small with just 14,276 units either built or planned in London and a further 7,112 for the entire UK outside of the Capital. However, because corporate landlords will be exempt from the new stamp duty charge being levied on buy-to-lets, the sector could increase in size.

It is also possible to put the money directly into build-to-let schemes or through funds such as M&G’s UK Residential Property Fund.

There are advantages to having corporate landlords investing in build-to-lets. Instead of small-scale landlords owning one or two properties which may be converted older houses, these new corporate-owned properties will be built specifically for the rental market and could offer professional management services as well as ‘extras’ such as gyms or Wi-Fi.

New builds can also attract more lucrative rents which can be as much as one-third higher than traditional, older properties.

A study by law firm Addleshaw Goddard has indicated that about one-third of new property developments in the first three months of 2015 were specifically built for rental.

The demand for homes is certainly there. The Government is committed to building about one million new homes by 2020 to meet demand. Likewise the London Mayor has also set a target of building 42,000 properties in London each year. Of these, 5,000 will be in the build-to-rent sector, according to a British Property Foundation report.

The build-to-rent sector can make sure that the right housing is built in the right areas for those who need it. Some towns and cities are losing young professionals because they cannot afford to buy – or do not wish to – and there is a lack of adequate homes to rent. They are also very unlikely to be eligible for social housing.

The rental market is set to expand too. A report by Savills suggests that by 2018, there will be 5.7 million people renting private property in England compared to the 4 million who rent at present.

So the demand is certainly there to drive a strong build-to-let sector in the forthcoming years.