Survey Confirms Industry Predictions

The British Property Federation (BPF) recently conducted a survey on the Build-to-Rent (BTR) sector, and the results align with industry expectations. Build-to-Rent is a sub-sector of the private rented sector, specifically designed and developed for institutional investment.

What is Build-to-Rent?

Build-to-Rent homes are purpose-built rental properties that focus on design, lifestyle amenities, and operational efficiency. Unlike traditional rentals, they offer modern tenant-centric features such as:

• Work-from-home spaces
• Digital communication tools
• Social living spaces (e.g., gyms, cinemas, post lockers, and clubrooms)

Institutional investors see Build-to-Rent as counter-cyclical, meaning it remains strong even during economic downturns, as tenants always need housing.

BPF Survey Reveals Strong Market Growth

The BPF survey reported a 15% increase in the total number of Build-to-Rent units by the end of Q2 2022.

• The number of BTR units rose from 209,313 to 240,202 between Q3 2021 and Q3 2022.
• While the sector continues to expand, growth has slowed slightly due to rising interest rates and inflation.
• The number of completed units in the first three quarters of 2022 was 10,493, compared to 14,410 in the same period in 2021.

Experts believe this slowdown is due to inflationary pressures, higher interest rates, post-Brexit labor shortages, and rising material costs.

Long-Term Growth and Future Prospects

Despite short-term challenges, the Build-to-Rent pipeline remains strong:

• 113,536 homes are currently in planning, up 15% year-on-year.
• Over the next decade, an estimated 380,000 BTR homes could be completed.
• The sector continues to provide high occupancy rates, strong income growth, and premium amenities.

The Montague Review’s Lasting Impact

The Montague Review, commissioned ten years ago, was instrumental in shaping today’s Build-to-Rent sector. It addressed institutional investment obstacles and led to:

• Greater government support for BTR in local and national planning policies.
• A shift toward long-term institutional investment in rental housing.
• Expansion of BTR as a catalyst for urban regeneration.

Ian Fletcher, Director of Policy at BPF, noted that the Montague Review successfully unlocked long-term investment into rental homes, helping to alleviate the UK’s housing shortage.

Ringley’s Role in the BTR Sector

Ringley, a tech-enabled residential real estate company, specializes in supporting investors entering the UK living sector. The company operates across the UK, managing over 13,000 homes with a strong presence in London, Manchester, and Cardiff.

Key aspects of Ringley’s approach include:

• Integrated tech-driven asset management
• ESG-focused investment strategies
• Optimizing total returns through proactive management

As green finance and ESG (Environmental, Social, and Governance) credentials gain traction, BTR properties with strong sustainability features are expected to command higher rents and yields, securing long-term investment performance.