Impressive Growth in UK Build-to-Rent Investment, But Total Falls Short of Forecasts
The UK’s build-to-rent sector has been experiencing impressive growth in recent years, with more and more investors turning their attention to this lucrative market. However, despite this growth, the total investment in build-to-rent properties has fallen short of initial forecasts.
According to a recent report by real estate firm JLL, the total investment in UK build-to-rent properties reached £2.4 billion in 2019, a significant increase from the £1.9 billion invested in 2018. This growth is a testament to the increasing popularity of build-to-rent properties among investors, who are attracted to the stable and long-term returns that this sector offers.
Build-to-rent properties are purpose-built rental accommodations that offer a range of amenities and services to tenants, such as on-site management, communal spaces, and flexible lease options. These properties are designed to cater to the growing demand for high-quality rental housing in the UK, particularly in major cities like London, Manchester, and Birmingham.
The build-to-rent sector has been gaining momentum in the UK over the past few years, with a growing number of developers and investors recognizing its potential. In fact, JLL’s report revealed that there are currently over 150,000 build-to-rent units either completed, under construction, or in planning stages across the UK. This is a significant increase from just 50,000 units in 2017.
One of the main reasons for the impressive growth of the build-to-rent sector is the increasing demand for rental properties in the UK. With rising house prices and stricter mortgage regulations, many people are choosing to rent rather than buy a property. This has created a strong demand for high-quality rental accommodations, which the build-to-rent sector is well-equipped to provide.
Moreover, the COVID-19 pandemic has further highlighted the importance of having a stable and secure place to live. With many people facing financial uncertainty and job losses, the rental market has remained resilient, making it an attractive investment option for many.
Despite the impressive growth in the build-to-rent sector, the total investment in 2019 fell short of initial forecasts. This can be attributed to the uncertainty surrounding Brexit and the general election, which caused some investors to adopt a cautious approach. However, with the UK’s political landscape now more stable, it is expected that the sector will continue to attract more investment in the coming years.
In addition, the build-to-rent sector has also faced some challenges, such as the lack of available land for development and the high costs associated with building these properties. However, with the government’s recent announcement of a £12 billion investment in affordable housing, it is hoped that this will also benefit the build-to-rent sector and help to address some of these challenges.
Despite these challenges, the future looks bright for the build-to-rent sector in the UK. With the demand for rental properties expected to continue to rise, and the government’s support for affordable housing, the sector is well-positioned for further growth. In fact, JLL predicts that the total investment in build-to-rent properties could reach £4 billion by 2025.
In conclusion, while the total investment in UK build-to-rent properties may have fallen short of initial forecasts, the sector’s growth is still impressive and shows no signs of slowing down. With the increasing demand for rental properties and the government’s support, the build-to-rent sector is set to become an even more attractive investment option in the years to come.
