Build To Rent investment breaks all-time record in Q1 2021

Data analysed by Ascend Properties reveals that Build to Rent investment breaks an all-time record in Q1 2021.

Salford Quays, Manchester which has seen Build to Rent investment - Ascend Properties | BTR News
Salford Quays, Manchester.

In Q1 2021, Build to Rent investment in the UK hit an all-time high. Analysis of the data by Ascend Properties shows that this level of investment now sits 335% higher than it did back in 2012.

The company has conducted a deep dive analysis of recent industry data that outlines estimated Build to Rent investment totals from 2012 to present. The findings strongly suggest that the sector is on its way to becoming the de facto choice for investors, developers and renters alike.

Despite enduring a difficult year due to the Covid-19 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.

Ascend Properties reports it’s not always been an easy journey for the Build to Rent sector. Since 2012, annual totals have fluctuated up and down – sometimes rising by more than 100%, and on other occasions 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 the sector was reaching a high and the sector benefited from a strong investment total of over £858m after growing by 47.2% since the previous year.

This growth was hindered in Q1 2020 by the emerging Covid-19 pandemic – although investment didn’t drop, annual growth slowed to 8.7% as investors paused to take stock of the changing world around them. 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.

“And furthermore, due to Build to Rent homes 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, etc, will likely enjoy even longer tenancies and even less turnover. All of this contributes to a very attractive investment opportunity for all involved.”

Ged McPartlin, Managing Director, Ascend Properties