Q3 2023 UK BTR investment totals £448m

An increase of activity has been identified in the Build to Rent market this year, as it continues to see an influx of investment activity.

Rodney Street. Placefirst started construction on The Green SFH Build to Rent bungalows earlier this year - Savills | BTR News
Rodney Street. Placefirst started construction on The Green SFH Build to Rent bungalows earlier this year.

In the company’s latest research, Savills reveals that Q3 2023 saw increased activity in the Built to Rent market, with 18 transactions taking place and investment volumes totalling £448m. The research also shows a record number of homes under construction – at 59,043 – despite a slowdown in starts due to economic headwinds.

According to Savills, Build to Rent now accounts for 10% of all UK real estate investment, demonstrating the resilience of the sector and its continued appeal to a global investor pool. 

The research also shows that there are 92,140 completed Build to Rent homes across the UK, an 11% rise year-on-year. The sector is also expanding its reach, with the number of local authorities that have Build to Rent in their planning pipeline reaching 200 for the first time.

“The proportion of UK Real Estate investment going into Build to Rent has been record breaking in 2023 as investors continue to diversify their real estate holdings towards the Living sectors. Q3 saw the single largest transaction of the year, between Long Harbour and St George, and the beginning of Q4 has already seen multiple transactions close. With 10% of all UK real estate investment now going to Build to Rent, and with its proven inflation-hedging credentials, this is a major asset class, and we expect continued growth in its share of investment allocations moving forwards.”

Polly Simpson, Head of Multifamily Development, Savills OCM

There are 112,511 Build to Rent homes in the planning pipeline, including those in the pre-application stage. The total size of the sector is 263,694 homes. The research also shows that the first Build to Rent scheme in Northern Ireland began construction in Q3. However, construction starts in London remained subdued due to the continued impact of the heightened cost of debt and changes in regulations around second stair cores.

Construction starts in the regions were more resilient (3,339), slightly down on the very strong Q2, but far above Q1 (1,543). This was bolstered especially by the growing number of single-family housing (SFH) schemes, with 20 having started construction in 2023 so far.