UK: The latest figures from Savills show that the the UK BTR sector attracted £800 million in investment during Q3 2024.
It describes the figure as “a notable increase from the same period last year”. Single family rentals (SFR) led the way, representing a record 50.4 per cent of total investment.
Savills says the rise in investment is being fuelled by both bulk and single site transactions, as investors seek scale to establish essential operational infrastructure. Bulk deal investments reached £1.2 billion in the year to Q3 2024, representing half of the £2.4 billion invested in the SFR sector. Single site schemes also saw significant growth, rising from £0.27 billion to £1.2 billion.
With slowing sales rates to homeowners and Buy to Let investors, institutions are seizing the opportunity to enter the market. Housebuilders have restructured their business models and formed PRS partnerships, demonstrating long term commitment to SFR. This shift acknowledges that sales rates, once bolstered by the Help to Buy scheme, may not return to previous levels.
A shrinking construction pipeline, down by 20 per cent in the last year, coupled with signs of contraction in the wider private rented sector, highlights the urgent need for continued investment with Savills observing BTR investment is essential to replace lost rental supply with high-quality, efficient homes. Local Authorities must take a proactive approach to BTR delivery, as partnerships between investors and housebuilders are crucial for future growth, it says.
Guy Whittaker, head of UK BTR Research at Savills, said: “The rapid growth of single site transactions alongside bulk deals shows that the recent rise in investment is a longer-term trend, rather than just a reaction to a softer sales market. Viability remains a hurdle in the current climate, with elevated debt and construction costs, as does the planning system, particularly in London. If these obstacles can be navigated, there is no shortage of investor demand to deliver new homes for rent, with more and more investors reallocating capital from other commercial real estate sectors into living.”
