The build-to-rent development pipeline has grown fivefold over the past five years.
There are more than 50,000 BTR homes completed or under construction, a rise of 498% in half a decade, according to a new report from Savills.
The Investing in Private Rent report reveals that in the past year the amount of operational stock has grown by 26%, with the amount under construction up by a third. In 2017, more than 70% of deals were forward-funding and forward-purchase deals.
Savills residential research analyst Lawrence Bowles said: “Residential property in the UK has a long track record of rental value growth.
“Rents are projected to continue to rise and that will underpin capital growth of build-to-rent assets, while growing rental demand will secure the income stream.”
Bowles said investors are letting go of the “comfort blanket” of flipping stock into the for sale market, and increasingly seeking long-dated income streams from build-to-rent. But the report expects the landscape will change dramatically in the coming years.
He said: “Many of the investors who will dominate the UK build-to-rent – most notably pension funds – may well not yet have entered the market. In 10 years’ time, it will be surprising if your pension doesn’t include at least one build to rent asset.”
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