The number of build-to-rent (BTR) homes is set to increase five-fold in the next decade – from 76,800 to more than 380,000 – according to research from the British Property Federation and Savills.
They predict that the sector could be worth £170 billion by 2032 when 8% of UK homes for rent will be purpose-built, up from 1.5% today. Single-family homes are set to make up almost a fifth (18%) of BTR stock in ten years’ time, up from 12%.
Since the UK’s pilot scheme opened at the Stratford Olympic Village in 2012, the neighbourhood has become a BTR success story and home to 7,000 residents. Ten years on, £30 billion has been invested in the sector nationwide, which now has 163,400 homes in the planning and delivery pipeline.
Fans of the model
While developers and investors initially focused on London, since 2017 there has been a shift towards other cities led by Manchester, Birmingham and Leeds. Many local authorities are now fans of the model, with 47% having BTR in their housing pipelines, compared with just 20% five years ago.
Jacqui Daly, director of residential research at Savills, believes that the demand for high-quality, professionally managed homes for rent is only going to increase, not only for the core demographic of graduates and young professionals but also for single families, couples and individuals of all ages.
Ian Fletcher (pictured), British Property Federation’s director of policy, adds: “The current market conditions underline that we must continue to diversify housing supply in order to drive economic growth, and the government must continue to look at how planning reform, more support for local authorities and the release of land for development can enable the sector to continue its upward trajectory.”