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The UK’s build-to-rent sector will grow rapidly over 2020, as large-scale purpose-built living becomes ever more acceptable and prominent.


The sector may still be in its infancy, but demographics in this case are its destiny. With the number of homeowners continuing to decline and the advantages of renting becoming more apparent, growth is hard-wired. Particular interest will be paid to two sectors: firstly, coliving, which will expand out of a few London schemes to become a more significant part of the residential offer in other urban centres. Secondly, the sheer scale of growth in the elderly population – and their needs, ranging from tailored amenities to specific care – suggests the interest in properly managed purpose-built facilities for retirement will intensify. In order to spread risk across the living sectors, operators will continue to target more complementary sectors where expertise and management skills can be easily transferred.


While the Prime Minister was relatively silent on housing during the election campaign, it will remain a key item on the political agenda.


The focus will remain on supporting first time buyers, with Help to Buy remaining in place until at least 2023. However, pressure will continue to deliver more affordable housing with 1.1m people currently on the social housing waiting list. There is unlikely to be an immediate push for more social housing or supply-side subsidies more generally, but two factors may steadily nudge the Government in that direction. Firstly, the declining numbers of homeowners – the traditional source of Conservative strength – is a long-term concern for the party, particularly in London and the South East. Secondly, its new electoral coalition contains larger numbers of blue-collar workers who may see affordable housing as a higher priority. The residential stock will also see a renewed focus on sustainability, with the Government currently consulting on stricter building regulations in this area.


House price growth across the UK will remain subdued in 2020, with 1% expected - a similar level to 2019. But 2021 will be a different story.


Confidence among businesses and consumers will rise after the end of the year, leading to a pick-up in growth. As a result, average growth of 2.8% per annum is expected over the next five years. Price growth is forecast to be strongest in Greater London, where an average of 3.2% pa will reverse the trend of the past few years, in which prices have grown more strongly in the UK regions than in the Capital. Housebuilder confidence will begin to improve towards the end of 2020, but it will take time for developers to build capacity and meaningfully ramp- up supply. The North West and East of England are expected to be the strongest regions outside London, outperforming the national average with house price growth averaging 3.1% pa. The weakest house price growth will be in the North East (1.9% pa) and Wales (2.2% pa).


UK Property Predictions 2020


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