Investment in the UK’s Built to Rent (BtR) sector reached £448m in the third quarter of 2023, according to research by Savills.
The real estate services provider recorded 18 significant transactions within the sector, which has seen a steady increase in its contribution to the overall UK real estate investment, now accounting for 10%.
Despite a general economic slowdown, the BtR market has maintained its appeal among global investors, with the current construction of 59,043 homes marking a record high for the sector. This growth has occurred even as the number of new project starts has declined, largely due to economic pressures.
The BtR market is not only growing in value but also in scope, with the number of local authorities with BtR projects in their planning stages hitting 200 for the first time. The sector’s total offering, including homes in the planning and pre-application phases, stands at 263,694 homes.
Polly Simpson, head of multifamily development at Savills OCM, commented on the sector’s resilience: “BtR has broken UK real estate investment records in 2023, and we saw this trend continue into the third quarter.
“The largest transaction of the year took place between Long Harbour and St George, and we’ve observed a strong start to the fourth quarter with multiple deals closing.
“With BtR now representing 10% of all UK real estate investment and its capability to hedge against inflation, we expect its share in investment allocations to grow.”
While new BtR project starts in London have been affected by increased debt costs and regulatory changes, regional starts have shown more resilience, particularly with the rising number of Single-Family Housing schemes, which have seen 20 new starts in 2023.
