The Build-To-Rent (BTR) sector now accounts for 10% of all UK real estate investment after a record-breaking year.
Savills’ latest research also shows a record number of homes under construction, at 59,043, despite a slowdown in starts due to the economic climate.
There are already 92,140 completed BTR homes across the UK, an 11% rise year-on-year, while the number of local authorities that have BTR in their planning pipeline has reached 200. Savills reports that there are 112,511 planned homes, including those in the pre-application stage, putting the sector’s total size at 263,694 homes.
Q3 2023 saw a flurry of activity, with 18 transactions taking place and investment volumes totalling £448m, according to Polly Simpson (pictured), head of multi-family development. She says investors are continuing to diversify their real estate holdings towards the sector.
“Q3 saw the single largest transaction of the year, between Long Harbour and St George, and the beginning of Q4 has already seen multiple transactions close,” adds Simpson.
“With 10% of all UK real estate investment now going to BTR, and with its proven inflation-hedging credentials, this is a major asset class and we expect continued growth in its share of investment allocations moving forwards.”
Savills reports that the first BTR scheme in Northern Ireland began construction in Q3, although starts in London remained subdued due to the continued impact of the heightened cost of debt and changes in building regulations around second staircases.
Starts in the regions were more resilient (3,339), slightly down on the very strong Q2, but far above Q1 (1,543). This was bolstered by the growing number of Single-Family Housing (SFH) schemes, with 20 already in construction this year.