In Focus Consumer Credit BTR record
Build-to-rent investment broke all time records in the first querter of 2021
Ged McPartlin Managing director, Ascend Properties
Build-to-rent investment in the UK hit an all- time high in the first quarter of 2021 and our analysis shows that this level of investment now sits 335% higher than it did back in 2012 – undeniable proof that build to rent is truly seen as the future of renting. The build to rent sector has been much
discussed in recent years. By some, it is considered the future of renting, while
others argue that it is a temporary fad that will soon be pushed back by traditional private renting. Now, we have conducted a deep dive
analysis of recent industry data that outlines estimated build to rent investment totals from 2012 to present, and the findings strongly suggest that the sector truly is on its way to becoming the de facto choice for investors, developers, and renters alike. Despite enduring a difficult year due to the
pandemic, build to rent investment totals in the UK broke all previous records in Q1 2021 when, after enjoying yearly growth of more than 38%, the sector received an estimated £1.2bn in investment. But it is not always been an easy journey
for build to rent. Since 2012, annual totals have fluctuated up and down, sometimes rising by more than 100%, sometimes dropping by as much as 50%. Much of this can be attributed to the fact that build to rent was, in early 2010s, an uncommon, innovative business model arriving from the USA. It took a few years for the industry to understand the model’s ins and outs and, most vitally, its incredible investment potential. By Q1 2019, confidence in build to rent
was reaching a high and the sector benefited from a strong investment total of over £858m after growing by 47.2% on the previous year.
August 2021
www.CCRMagazine.com 25 This growth was hindered in Q1 2020 by
Covid and, while investment did not drop, annual growth slowed to 8.7% as investors paused to take stock of the changing world. Despite these years of up and down, since 2012, the estimated total investment in UK build to rent has grown by 335%. The benefits of build to rent are multi-
layered. For renters, it offers a new, exciting alternative to the private rental market. The sector focuses on vibrant, urban living and is built around an ethos of community that is missing from traditional rental markets.
As new generations opt to rent as a
lifestyle choice, we will see demand for build to rent soar even more. But the greatest benefits are there for
developers and investors. Build to rent is, at its core, a very simple model. Because of this, it is a relatively risk-free venture. Developers are, for example, less reliant on collaboration with third parties such as estate and letting agents to find tenants for the units, thus increasing the speed and efficiency of filling new developments. Furthermore, due to build to rent homes
It is not always been an easy journey for build to rent. Since 2012, annual totals have fluctuated up and down, sometimes rising by more than 100%, sometimes dropping by as much as 50
often being a step up in quality and standard compared to private rental market, tenants are often inclined to sign longer tenancy agreements, thus reducing the risk of voids. The sector is seen by some as a bridge
between renting and owning, so those developers who go as far to provide freedom for tenants to personalise their home with wall colour, and so on, will likely enjoy even longer tenancies and even less turnover. All of this contributes to a very attractive investment opportunity for all involved. CCR
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