As international travel restrictions are eased, and vaccines against Covid-10 continue to be rolled out, the UK property market is experiencing positive developments with investors showing renewed interest.
The boost in demand is particularly telling in the UK Build-To-Rent (BTR) sector. Having already experienced its most active quarter of investment ever in Q3 (July-September) 2020 of £1.84bn, based on Savills data, BTR is proving to be a significant beneficiary of shifting lettings expectations as well as First Time Buyer demand.
Leading property portal Zoopla predicts that the UK is due to experience its busiest December for property transactions in a decade culminating in 1.1m total transactions for 2020. This is representative of a 50 per cent larger sales pipeline than last year, a stark contrast to the seasonal slowdown typically expected.
Mirroring these enhanced buyer appetites is a pronounced shift in lettings. Flat sharing site Spare Room predicts a 13 per cent exodus of renters from London, once the pandemic is over, with tenants increasingly prioritising green outdoor space, quality amenities, communal space and home-working environments. Underpinning the growth and resilience of BTR is its ability to satisfy such demands, with best-in-class providers differentiated through access to excellent transport links and premium services.
The Stamp Duty Land Tax (SLDT) holiday has been a key driver of market activity in 2020. Even if the SLDT is not extended beyond March 2021, as analysts expect, growth momentum is likely to continue particularly given new data showing lending at its highest level (£78.9bn of new mortgage commitments) since the third quarter of 2007.
With England relaxing quarantine restrictions for “high value” business travellers as December 5, and BTR’s appeal as a long term source of reliable returns, Savills’ prediction that the sector could make up a third of the private rented sector at full maturity is being meaningfully realised at a rapid pace.
Covid-19 has impacted activity across all real estate sectors. But, it is testament to the fundamentals that underpin Build to Rent that the sector has been able to bounce back so quickly. We are now seeing new entrants to the sector as investors are seeking secure, long-term income streams while developers are progressing sites across the country, according to Savills.