Wednesday 11 August 2021 12:43 pm

Build to rent on track for record investment as investors eye projects outside London

The build to rent market has received record levels of investment in the first two quarters of the year, according to new research. 

In the first half of the year, £2.35bn of capital was invested into the sector including more than £1.27bn in Q1 and an additional £1.08bn in Q2.

Global property consultancy Knight Frank has found a 79 per cent increase in investment volumes compared with the same point of 2020.

Investment is expected to reach record levels in 2021 after more than £3.5bn of capital was invested last year.

Flatted rental schemes and co-living projects have piqued investors’ interest while there has also been significant growth in demand for rental housing in the past 12 months.

Around seven in 10 of funds committed in the first half of the year were for projects outside of London, as renters desire slower, more spacious lifestyles after the pandemic.

Big name deals this year have included Legal & General committing £60m to fund a new 500-unit build to rent development in Leeds city centre.

Newcastle-based firm Grainger purchased a 231-home scheme in Bristol for £63.1m, the city’s first purpose-built private rented sector development. 

The professional landlord also bought a 283-apartment housing development in Newcastle from Moorfield Group for £57m. 

“Over the past 18 months, we’ve seen a significant uptick in both appetite from existing investors looking to deploy further capital into the BTR space, as well as a range of new domestic and international investors looking to enter the market,” Nick Pleydell-Bouverie, head of residential capital markets at Knight Frank, said.

Average monthly rent collection rates have reained about 96 per cent so far this year, Knight Frank data found.

Pleydell-Bouverie added: “Alongside its resilience, what is really driving investor demand is the granularity of the income and scale of the opportunity.”