The Build to Rent (BTR) Market in the UK

Build to Rent (BTR) is a rapidly growing sector in the UK property market. BTR schemes are purpose-built blocks of apartments or houses that are rented out to tenants, rather than being sold on the open market.

There are a number of reasons for the growth of the BTR market. One reason is the increasing demand for rental accommodation. The UK population is growing, and the number of people renting their homes is also increasing. This is due to a number of factors, such as the rising cost of buying a home, the increasing number of young people who are unable to afford to buy a home, and the increasing number of people who are moving around the country for work or other reasons.

Another reason for the growth of the BTR market is the increasing investment in the sector. Institutional investors, such as pension funds and insurance companies, are seeing BTR as a good way to invest their money. This is because BTR offers a number of advantages over other types of investments, such as the fact that it is a relatively low-risk investment and it provides a steady stream of income.

The growth of the BTR market is creating a number of opportunities for the supply chain and for property investors. For the supply chain, the growth of the BTR market is creating a demand for new construction materials and services. For property investors, the growth of the BTR market is creating an opportunity to invest in a sector that is expected to grow in the future.

Forecasts for the BTR Market
• Savills predicts the UK BTR market will grow to 250,000 homes by 2025, from 82,500 homes in 2022.
• Knight Frank predicts that the UK BTR market will reach £100 billion by 2025.
• AMA Research predicts that the UK BTR market will grow at a compound annual growth rate (CAGR) of 15% from 2022 to 2025.
These forecasts are based on a number of factors, including the increasing demand for rental accommodation, the increasing investment in the sector, and the growing popularity of BTR schemes among tenants.

The average cost per month for a build-to-rent (BTR) rental property in the UK is £1,250, according to research by Knight Frank. This is significantly higher than the average rent for a private rented sector (PRS) property, which is £943.

It is important to note that the average cost per month for a BTR rental property can vary depending on a number of factors, including the location, size, and quality of the property.

Here are some of the key findings from the Knight Frank research:

• The average rent for a BTR property in London is £1,800, compared to £1,200 for a PRS property.
• The average rent for a BTR property outside of London is £1,000, compared to £750 for a PRS property.
• The demand for BTR properties is outstripping supply, which is driving up rents.
• BTR landlords are investing in higher quality properties, with more amenities and services.
• BTR landlords are more professional and offer a more consistent service than PRS landlords.

Source: Knight Frank, “Build-to-Rent: The State of the Market 2023”

Additional data points that support the growth of the BTR sector:
• In 2022, the UK saw a record £4.3 billion invested in the BTR sector.
• In the first quarter of 2023, the UK saw £820 million invested in the BTR sector.
• There are currently over 100 BTR developers operating in the UK.

Opportunities for the Supply Chain and Property Investors
The growth of the BTR market is creating a number of opportunities for the supply chain and for property investors. For the supply chain, the growth of the BTR market is creating a demand for new construction materials and a variety of services.

For property investors, the growth of the BTR market is creating an opportunity to invest in a sector that is expected to grow in the future.

The advantages of investing in the BTR market include:
• The relatively low risk of investment.
• The steady stream of income from rent payments.
• The potential for capital growth in the value of the properties.

Ongoing Maintenance and Upkeep
The ongoing maintenance and upkeep of BTR properties is an important part of the BTR business model. This is because tenants expect to live in homes that are well-maintained and in good condition. The maintenance and upkeep of BTR properties can be carried out by the BTR developer or by a third-party contractor.

The cost of property maintenance and upkeep can vary depending on the size and age of the properties, the type of construction, and the location of the properties. The BTR developer, owner or contractor should have a plan for maintenance and upkeep that includes regular inspections, repairs, and replacement of worn or damaged components.

Conclusion
The BTR market is a rapidly growing sector in the UK property market. The growth of the BTR market is creating a number of opportunities for the supply chain and for property investors. The ongoing maintenance and upkeep of BTR properties is an important part of the BTR business model.

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