Build to Rent Recovery Shows Strength of the Market
During the height of the Covid pandemic, there was significant uncertainty surrounding the future of the Build to Rent market in the UK. Following successive years of increased investment in the sector, British Property Federation (BPF) figures showed an 18% drop in completion rates in 2020. Many worried this might precipitate the end of the growth in the market.
Fast forward to the first quarter of 2022 and the news looks much better. According to JLL figures, funders invested £600 million more in the first quarter of this year compared to 2021. This news follows hot off the heels of Strawberry Star Group’s announcement of a new build to rent investment of £1 billion through to 2027. It’s new arm, Star Living, is targeting commuter towns and cities that have been earmarked for rental growth. It is already delivering in the likes of Harlow, Gravesend, and Luton, indicating the areas that may see most of that growth.
Why the recovery? It is our view the fundamentals of the build to rent market are strong. Analysis by Capital Economics has found a need for around 230,000 new rental homes a year, to keep up with demand. With such strong demand, the Build to Rent proposition becomes very enticing. For investors, the ability to secure stable yields on investment increases, and for consumers, a professional managed, high-quality rental home is a more enticing prospect than years spent within the traditional private rented sector. For politicians and policy makers, this emerging sector may help to solve the puzzle of the lack of quality housing supply that has vexed Governments of all political persuasions.
At Urban and Provincial, we see the Build to Rent market as a strong one, and we have already partnered once, with Telford Homes, for a 239 Build to Rent scheme in Ilford. This scheme will also deliver properties at a London Living Rent level, providing affordable homes in an area that needs this provision.
We are proactively looking for additional such opportunities, particularly in areas with strong public transport links. If you have a site that might fit the bill, please email info@urbanprovincial.com or call 020 3875 8933.
