Market update: BTR’s Full House
Build to Rent (BTR) is on the rise across the UK, particularly in England, where there is a growing interest in and appetite for BTR investment.
Despite the volatility in the real estate market and the uncertainty caused as a result of the UK’s turbulent Brexit negotiations, BTR as an asset class has been moving from strength to strength. Major developments are now taking place across the UK, displacing the once-held notion that BTR was a London-centric asset class.
Recent figures from JLL have shown the rising demand for BTR in Yorkshire, where in Leeds alone, 29 sites have been identified with a capacity to deliver over 10,000 apartments, potentially doubling existing BTR stock in the city. Sheffield has also experienced an increase in BTR activity with Grainger, JLL, and L&G investing in the steel city.
Similar market forces are at work in Bristol and Birmingham. Research from JLL showed that BTR is set to bring over 2,000 homes to Bristol by 2021, and that Birmingham will be the UK’s top city for attracting PRS investment over the next five years.
This explosion in BTR activity is not just limited to England.
Last month, L&G signed off on a deal for the largest privately funded BTR development in Wales. The Cardiff regeneration project will consist of 318 units worth £400m, signalling a strong confidence in the Welsh market.
There has also been considerable growth in Scotland, where numbers released by the British Property Federation show the total number of BTR properties under construction has increased by almost 40%. L&G recently invested in a 324-unit development at Buchanan Wharf in Glasgow, the city that undoubtedly leads the way for BTR in Scotland with planning consent in place for more than 3,100 BTR units.
In Northern Ireland, the first large scale BTR scheme is currently being built in Belfast, with another scheme for 277 units currently in planning. If Wales and Scotland are anything to go by, Northern Ireland may be about to hit a boom of their own.
So why does BTR continue to defy market forces across countries and regions amidst a downturn in the housing market and the wider economy? The reasons are likely to be the same as its initial emergence in London; increasing levels of flexibility desired by workers and young professionals, coupled with an inability to secure deposits to purchase a property has forced ‘Generation Rent’ to look for an alternative to the ‘wild west’ of the rental market.
Despite the political and economic instability, all signs point to further market growth for BTR across the UK.
Source: Engage CF.
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