Value of UK Build to Rent sector set to rise to £102bn by 202819 Jun 2023 10:40
The UK’s Build to Rent sector is set to grow 82% in the next five years, according to global property consultancy Knight Frank.
Global property consultancy Knight Frank says that the value of the UK’s Build to Rent market has grown to £56bn – up 60% from £35bn in 2019. The new figures are based on the company’s analysis of current operational Build to Rent stock and stock under construction. Based on analysis of the Build to Rent pipeline, the Knight Frank believes the figure will almost double in size to £102bn by 2028 – representing an 82% increase. The new figures were reported in the firm’s annual Multihousing Report 2022/23, released on 1 December 2022.
According to Knight Frank, £3.2bn of capital has been committed to the UK’s Build to Rent sector during the first three quarters of 2022, with a further £650m expected to trade before the year ends. Knight Frank says this would take full year investment to £3.8bn – 31% higher than the 2016–2020 long-term average.
Knight Frank reports that 65% (£2.15bn) of investment in 2022 has been from pension and insurance firms, with the remaining 35% of capital invested by a combination of propcos, REITS and private equity firms.
North America was the biggest source of overseas investment into the UK’s Build to Rent sector in 2022 according to Knight Frank; the firm estimated that North America made up 28% of overall capital invested. Europe made up 23% of overseas investment, with Asia-Pacific investors accounting for 2%. Almost half (42%) of capital was invested by UK firms.
Analysing the UK’s growing Build to Rent pipeline, Knight Frank says the number of completed units has tripled over the last five years. There are over 72,000 complete and operation Build to Rent homes in schemes of 75 units or more across the UK. A further 57,000 units are currently under construction and an additional 61,000 have full planning permission granted. This brings the total pipeline to 190,000 homes (excluding sites in pre-planning). According to Knight Frank, 24% of local authorities now have at least one Build to Rent scheme open and operational within their jurisdiction.
However, Knight Frank also say rental stock in the UK is still in short supply. There have been more than 260,000 buy-to-let mortgage redemptions over the last five years as private landlords look to exit the market. Unemployment is near record lows, the population continues to rise, wage growth remains strong, and access to mortgage finance is restricting owner occupation. This outlook is supporting rental growth.
https://btrnews.co.uk/value-of-uk-build-to-rent-sector-set-to-rise-to-102bn-by-2028/
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