The strong fundamentals of a rental market with a chronic undersupply are attracting a growing amount of institutional capital says Knight Frank.

More than £1.4 billion worth of deals were agreed in the final three months of 2021 in the UK Build To Rent sector, pushing year-end investment volumes to a record £4.3 billion. 

Annual spend was up 19 per cent on 2020, the previous record year. Deal volumes were also up by nearly a third year-on-year. 

The agency says: “We forecast that rental values will increase by 17.1 per cent over the next five years in the UK, as the lettings market is underpinned by these strong fundamentals. 

“The equivalent figure is 22.7 per cent in prime central London and 19.3 per cent in prime outer London.” 

Underlining the strength of demand, the number of international corporate relocation enquires received by Knight Frank from prospective tenants in March reached its highest level since August 2019. 

“Demand is hard to satisfy at the moment and it will only grow as summer approaches” says John Humphris, head of relocation and corporate services at Knight Frank. 

“If you own a good property at the moment, the chances are that it will be let before it even comes to the market.”