Could 2021 Be the Year of Build-to-Rent in London and Beyond?

Build-to-Rent in 2020

Recent research from the British Property Federation shows something surprising. The build-to-rent sector not only held steady in 2020 – it grew. The number of completed build-to-rent homes increased by 23% in Q4 2020 to a total of 53,750, compared to 43,598 in Q4 2019. The figures show this trend is set to continue, too, as there were also 22% more projects in the planning process than the previous year, and 5% more under construction.

Build-to-Rent Investment

Current figures show that build-to-rent developments are appealing to both tenants and investors. In fact, analysis from Savills revealed Q3 in 2020 is so far the sector’s strongest ever single quarter, with £1.84bn invested.

Even with the severe delays and disruption caused by lockdown restrictions, the build-to-rent sector saw £3,097m of investment between January and September 2020. This is 4.6% higher than the total investment across 2019.

With rental accommodation remaining a popular and vital part of the property landscape, there is room for even further growth in the build-to-rent market.

“The figures back up the underlying sentiment that build-to-rent continues to be one of the key drivers in housebuilding in the UK.”

Harry Hodell, Pure Structured Finance

Where is Best for Build-to-Rent?

With the sector in such a strong position, you may be wondering which location is best for your build-to-rent development. There are in fact several hotspots in the UK, but it will come as no surprise that London has the largest number of build-to-rent developments. In fact, around half of the UK’s build-to-rent homes are located in London.

The capital remained the prime location in 2020, with completed build-to-rent London developments rising by 26% in Q4, compared to the previous year – a larger increase than the national average.

Outside of London, build-to-rent is particularly strong in the north-west of England. Here, there were 32,395 homes complete, under construction or in planning in 2020 – the largest number besides the capital. The north-west region also saw the largest rise in build-to-rent developments at the end of Q4, with a 31% increase from 2019.

Birmingham is another city where rental developments continue to thrive. Build-to-rent in Birmingham accounts for approximately one third of the 5,000 residential units being built. Additionally, as Birmingham is one of the youngest European cities (with nearly 40% of residents under the age of 25), purpose-built rental accommodation is in high demand.

So, when it comes to deciding the best location for a build-to-rent development, there are several attractive options. However, we would always recommend sitting down and chatting with a local estate agent or property expert before investing to ensure demand is high and an area isn’t overly saturated with this type of property.

Find Build-to-Rent Finance for Your Dream Development

Here at Pure Structured Finance, we have strong relationships with lenders and a wealth of industry experience. Trust our dedicated team to find the right development finance for your built-to-rent project.

Give us a call on 02080 579 178 to speak to one of our experts, or request a callback.