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Build-to-Rent investment set to triple by 2021

Research by Knight Frank reveals huge likely rise in BTR as more and more people rent

Nigel Lewis

Nearly a quarter of all the UK population will be living in rented accommodation in just five years’ time according to Knight Frank, driven largely by a huge expansion in build-to-rent (BTR).

Investment by the City in BTR is set to rise to £70 billion by 2021, the report reckons, up from the current £25 billion.

Some 65% of this money is being and will be spent in London, Knight Frank discovered after interviewing the key 26 investors in BTR.

“The strength of the UK PRS sector has grown demonstrably in recent years. As consumer demand for affordable, flexible accommodation continues to rise, PRS is firmly establishing itself as a key opportunity for institutional grade investment, due to its long-term potential,” James Mannix, Head of Residential Capital Markets at Knight Frank

Knight Frank’s report also reveals that 68% of renters expect to be renting in three years’ time rather than moving on to the property ladder, helping increase the number of private renters to 5.79 million.

Current trends

Other trends driving this, it says, include the costs of Stamp Duty when buying a property, the needs of young professions to be more mobile as they move around the UK with work, and the reduction in the number of private landlords within the private rental market.

While surveying some 10,000 tenants, Knight Frank found that affordability is the key concern for them, ahead of location and size of property.

“The flexibility that renting offers has reinforced its popularity as both a sensible and accepted solution for young couples without children and those living on their own but also highlights an expected rise in older households over the next five years,” says Tim Hyatt, Head of Residential Lettings at Knight Frank.

  • BTR: an example
The first company to bring a development to market in the UK with a BTR product was Essential Living. Its first site to complete is in Archway, North London. The £7 million development is called Vantage Point; residents have access to a concierge, top-floor social and entertaining space (see pic above). Overall Essential Living has a slate of developments due to deliver 5,000 homes. It’s second development is in Bethnal Green, also in London, which will include 104 apartments. Like its other developments, tenants pay not agency fees or service charges.
June 12, 2017

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