Dubbed the ‘UK’s most resilient real estate sector” in a report from global real estate firm CBRE, the Build to Rent (BTR) sector in the UK is on track to represent nearly 20 per cent of all UK households: such has been the extent of its tremendous growth of late.

A key trend driving the seemingly unabated rise of the sector is the UK’s long recognised demand for housing, with estimates that 300,000 houses are needed per year, far exceeding the 125,000 homes that are actually built annually. Hence, recent reports, which show that the number of professionally managed high-quality BTR homes have risen by 22 per cent in one year (to 167,853), are a testament to the value they provide in servicing this need.

Data from the British Property Federation (BPF) and Molior show that between Q2 2019 and Q2 2020, the number of BTR homes completed increased 37 per cent whilst the number in planning also rose 27 per cent. This rapid expansion reflects evolving consumer demands, and quality standards, which the market is now recognising. As landlords continue to redeem buy-to-let assets, over 120,000 such mortgages were redeemed through 2018 & 2019, and sell properties; Savills’ BTR analysis expects purpose-designed and built homes to make up the majority of housing supply in future.

Government support for new build housing, through the popular Help to Buy scheme, is due to be heavily restricted in April 2021, with complete cessation in March 2023. This will diminish buyer access to financing and homeownership, with affordability reductions making BTR an increasingly valuable commodity to buyers. All this whilst, on the other hand, government support for BTR through schemes, such as the PRS housing guarantee, are mounting & indicative of the longevity the sector has to offer as the development of private rental homes grows.

Using the more mature student accommodation market in the UK as a comparative benchmark, wherein 35 per cent of full-time students are housed in purpose-built & designed residences, the Savills report estimates that UK BTR has the potential to accommodate 1.7 million households at full maturity, with a total value of almost £550 billion.