New preliminary figures released by CBRE reveal that a record £4.1 billion was invested in the UK’s Build to Rent sector in 2021, including investment of £2.1 billion during the last quarter of the year. 

That follows in the footsteps of UK Build to Rent investment deals worth £3.5 billion taking place in 2020 – the previous record high. 

The intensity of investment in Build to Rent homes is showing in the sector’s rapid growth. According to research by Ascend Properties, the sector now accounts for one per cent of all private sector rental properties in the UK. That’s an increase of 135 per cent in stock levels since 2017. The total number of private rental sector homes has grown by just 0.3 per cent over the same period. 

In actual terms, the Build To Rent sector has grown from 22,831 properties in 2017 to 53,750 in 2021. 

Investors and tenants alike have been drawn to it. Renters have embraced the opportunity to enjoy homes designed specifically for them, with a host of on-site amenities and a ready-made social life. They have demonstrated a clear willingness to pay over the odds for that convenience, with research by ideal flatmate finding that Build to Rent accommodation is on average 15 per cent more expensive than the cost of renting privately in a buy-to-let property. 

That finding, naturally, has not been lost on investors, with property funds, institutional investors and banks all keen to be part of the sector’s future. That future certainly looks bright as we head into 2022. 

Provisional data from CBRE shows that £1.95 billion worth of deals were under offer at the end of 2021. Meanwhile, Savills reports that the future Build to Rent pipeline, based on activity in the sector, currently stands at 99,500 homes, while a further 42,000 are already under construction. While not all of those 141,500 homes will complete during 2022, a fair proportion will, representing huge growth in available stock at the same time as investors continue to pour money into future developments. 

Interestingly, regional Build to Rent growth is likely to be big news in 2022. 

London has led the way since the sector’s inception in the UK, with Build to Rent homes now accounting for 2.5 per cent of all privately rented accommodation in the capital, according to Ascend Properties. However, it is the UK’s regional cities that will be driving the pipeline this year. 

Savills reports that urban centres such as Manchester, Liverpool and Brighton saw construction begin on 12,000 Build to Rent homes in the year to Q3 2021 – the highest such figure on record for the regions and a clear indication that 2022 will be Build to Rent’s year outside of London (as well as within it). 

As the Build to Rent sector matures, so too are the expectations of both renters and investors maturing. Build to Rent has become an established product in its own right, offering a new kind of urban lifestyle experience. 

At a Build to Rent event in December, major operators in the sector discussed precisely this. 

The emphasis was on examining how the sector can really enhance the renting experience, delivering far more than just a ‘bricks and mortar renting’ approach. They were all looking at creative ways to make renting more of a life-enhancing experience, whether through onsite facilities, utilities or technology, as well as reducing barriers to accessing rental properties. 

There was also plenty of talk about merging some of the major plus points and learnings from purpose-built student accommodation into the Build to Rent sector. Another key theme was increasing the appeal to the ‘grey pound’ – attracting older renters happy to release equity and move into a vibrant, socially active community. 

Clearly, the Build to Rent sector has plenty still in store to deliver. Meanwhile, the record investment of the past two years reflects its ability to weather the impact of the pandemic, setting the stage for a continued boom in 2022 – and beyond. 

*James Maguire is head of sales and business development at Housing Hand, the UK’s largest rental guarantor service