Build to Rent

Build to Rent (BTR) investment continues to be very strong, with record investment for the first half of a year so far at £2.6bn. The majority of this continues to be from development funding deals, although there have been some notable operational trades, including DWS’ acquisition of 180 homes for rent from Notting Hill Genesis at Royal Albert Wharf in London. There are now roughly 74,000 completed BTR units across the UK, with 48,000 under construction and about 116,000 in planning.

Against the backdrop of high levels of rental growth across the UK and rising house prices stretching First Time Buyer affordability, the investment case for the sector continues to look compelling. Accordingly, we expect this to be reflected in investor appetite for the sector over the rest of the year. The resilient performance of operational assets over Covid has added to its appeal and the sector looks relatively well positioned from an investment perspective in the face of the current economic headwinds.

An important trend within the market over the last couple of years has been the rising activity within single family BTR housing (aka suburban BtR). The pipeline for this kind of housing is now around 20,000 homes, from being virtually non-existent two years ago. This is an evolution of the sector and we believe it will continue to see rapid growth as a number of large entities have raised funds or announced intentions to target single family BtR.