Build to Rent homes surge in popularity and market share

Build to Rent homes surge in popularity and market share

9:59 AM, 27th February 2024, About 3 months ago

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Build to Rent (BTR) homes are becoming increasingly attractive to renters and investors, as new data from Foxtons shows that they now represent 2% of the UK’s private rented sector (PRS) and 4.2% of London’s PRS.

The lettings and estate agency conducted a market analysis of the BTR sector, which consists of purpose-built rental properties that offer high-quality amenities, flexible tenancies and professional management.

Its analysis reveals that the sector has grown steadily since 2018, when it accounted for only 0.6% of the UK’s PRS and 1.8% of London’s.

Last year, the sector reached its highest market share ever, with 100,372 units available to renters, compared to 5.5 million PRS units in total.

61% increase in BTR completions

The growth was particularly remarkable in London, where there has been a 61% increase in BTR completions since 2018.

Foxtons attributed this to the strong demand from tenants in the capital who value the convenience, comfort and security that Build to Rent homes offer, it says.

The firm’s managing director of institutional, Sarah Tonkinson, said: “We’ve seen phenomenal growth across the Build to Rent sector in recent years, particularly within the London market and, as a result, Build to Rent completions now account for their highest proportion of total PRS stock.

“However, it’s fair to say that the sector still remains in its relative infancy and so the potential for further growth is vast.”

‘Quality of rental accommodation available’

She added: “With a move towards longer term renting until later in life, tenants expect more both with respect to the quality of rental accommodation available, and the security and certainty that long tenancy agreements provide them.

“With the Build to Rent sector offering this, and more, we only anticipate demand to increase and for stock levels to follow suit in order to satisfy the evolving needs of renters.”

The number of BTR units available to private tenants has increased by 69% since 2013, while total PRS stock has increased by just 3% during the same period.

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