The Build to Rent (BtR) sector in the UK attracted significant investment in 2023, totalling £4.5 billion, as reported by Savills. This figure falls just short of the record £4.6 billion invested in the previous year. The Single Family Housing (SFH) segment, which secured a record 42% of the total investment, amounting to £1.9 billion, marking a substantial increase from the 8% recorded in the preceding year.

Savills attributes this surge in investment to the persistent demand for rental properties, influenced by factors such as elevated mortgage rates, a decline in buy-to-let properties, and the conclusion of the Help to Buy scheme.

The report underscores the imperative for the government to meet its annual housing target of 300,000 homes, with a specific focus on 60,000 of these within the private rental sector.

Guy Whittaker, head of UK Build to Rent Research at Savills, reflects on the sector's resilience, stating, "Despite macro-economic challenges, including an elevated cost of debt and continued material and labour-cost inflation, the sector has proven resilient. The BtR market has experienced sustained growth due to the housing supply and demand imbalance and high levels of rental growth. This has resulted in inflation-matching returns, with yields proving comparatively strong."

The report also acknowledges the achievement of over 100,000 completed BtR homes in the UK, with an additional 53,800 under construction and a future pipeline of 112,800 homes, totalling 267,000 homes in the sector.

Whittaker expresses optimism about the sector's future, projecting growth to 360,000 homes by 2033. He cites the potential for operational efficiencies and improved data on portfolio performance as contributing factors.

Additionally, the planning pipeline has expanded beyond the North West, with emerging sites in the Midlands and South East indicating the sector's evolution. Over the next five years, London and core cities are anticipated to account for 62% of completions, with London contributing 35,000 homes and core cities adding another 33,000 BtR homes.