Knight Frank predicts that annual investment in the UK build-to-rent sector could reach £4.8bn by the end of 2022.
The agency said investment over the first half of the year stood at £1.7bn – 25% higher than the long-term average.
Investment in the second quarter was lower than in the first, but still 31% above the long-term quarterly average for the sector.
Nick Pleydell-Bouverie, head of residential investment at Knight Frank, said: “The numbers, which track both on and off-market deals, point to the ongoing resilience and strong investment appeal of the sector – even in the face of continued build cost inflation and a more challenging economic backdrop.
“The robust income offered by BTR and strong rental growth across the sector is continuing to attract significant new capital to the market.”
The average deal size during the second quarter was more than £75m, up from an average of £64m in Q1. Key deals transacted in the second quarter include Grainger’s acquisition of Redcliffe Quarter in Bristol, Get Living’s forward fund of Maker’s Yard in Birmingham, and Heimstaden’s forward sale in Edinburgh.
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