Savills has predicted that only a fifth of the £20bn invested into Build-to-Rent between 2018 and 2023 has been deployed- and more investment is expected
Savills latest report on the UK Build-to-Rent sector shows a promising forecast for increased investment, with the first quarter of 2024 seeing the highest proportion of investment into BtR schemes since 2015.
60% of Build-to-Rent investment was actioned in operational assets and the remaining 40% into funding development.
Savills went on to predict that between 2024 and 2028, investment in the UK Build-to-Rent market will represent a 25% share of total investment, rising to 30% in the four years after.
The past decade has seen £35bn of institutional investment
This figure has supported the delivery of 100,000 BtR homes, comprising 542 apartment schemes let and managed by industry operators.
Of the £20bn invested in the last five years, only a fifth has been utilised by investors. The Savills research also found that there are 110,000 BtR homes planned, the largest number recorded so far, suggesting the sector’s period of growth is yet to see its peak.
If Build-to-Rent mirrors the success seen in student accommodation, Savills added that it would “start to double in size every couple of years”.
There is still “significant growth potential” of UK BtR market
Piers de Winton, head of national residential investment and single family, operational capital markets, at Savills, said that: “the BtR market has made significant progress over the last 10 years.”
“Although the sector is emerging as mainstream investment in the UK, it still represents just 2 per cent of private rented sector households.
“When we look at more established markets such as Germany and the USA, where institutions own 41% and 37% of homes respectively, it’s clear that there is significant growth potential of the UK BtR market.
“Should the UK adopt a similar level of institutional ownership, institutions would own between 2.1 and 2.4m PRS homes compared to just 100,000 today.”
