Savills’ UK Build to Rent Market Update for Q1 2024

Savills releases its Q1 2024 UK Build to Rent Market Update, highlighting the popularity of schemes and investment and development activity.

Wembley Park, where two of the biggest investment deals took place in Q4 2023, as highlighted by Savills | BTR News
Wembley Park, where two of the biggest investment deals took place in Q4 2023, as highlighted by Savills.

New research from Savills’ UK Build to Rent Market Update for Q1 2024 shows that renters are willing to travel further to live in a Build to Rent scheme, compared to the wider Private Rented Sector (PRS) – showing the popularity of schemes amongst renters.

The median distance of movers to Build to Rent in the UK is 5.8 miles. This is almost double the distance for the wider PRS (3 miles) and 39% further than for new build Buy to Let (4.2 miles). The furthest median distance of 8.3 miles is in Core Cities that are generally key employment areas within their region. These Core Cities attract talent from further afield.

Both inner and outer London have the lowest median distance, due to a large proportion of movers already living and working in the capital. 

Savills also highlights that the pull for renters to live in a Build to Rent development goes beyond just wanting to live in a new build property. The standard of accommodation, amenities, professional management, better energy efficiency and a focus on building communities all play their part.

UK Build to Rent investment activity

There were fewer investment deals closing in the quarter – marking the slowest Q1 since 2014. This follows higher investment activity at the end of Q4 2023, which saw 10 deals completed with a combined value of £555m.

Two significant deals included the sale of Quintain’s three Build to Rent assets – Alto, Dakota and Montana – to Goldman Sachs and Tene Living, and KKR’s acquisition of two Quintain Build to Rent developments – Alameda and Beton.

Deals across regional Build to Rent and single-family housing (SFH) was very low in Q1 2024, owing partly to a strong Q4 2023 – which was the second highest Q4 on record.

UK Build to Rent development activity

The research suggests that investors are prioritising existing Build to Rent schemes over new ones, as starts fall below completions.

The number of completions in the previous 12 months eclipsed starts for the second quarter in a row. In Q4 2023, 12 month rolling completions outpaced starts for the first time since 2020, with a gap of 421 homes, which has now increased to a gap of 3,404 homes. This comes with UK 12-month completions at their highest level since 2021 and starts their lowest level since 2016. 

There are 59,000 homes with detail planning permission, which supports the future construction pipeline – as well as supporting starts to recover to previous levels. However, the number of homes at the detailed application stage are down by -31% compared to Q1 2023. Savills suggests that new sites are needed to secure long-term delivery pipelines.

Currently, the total size of the UK Build to Rent sector is 265,606 homes – up 4% compared to Q1 2023. There are 101,875 completed homes – a 17% national increase compared to Q1 2023. 54,814 homes are under construction and 108,917 homes are in the planning pipeline – including those in the pre-application stage.