Executive Summary

The UK’s Build-to-Rent (BTR) multifamily sector is still emerging with just 101,875 operational units, compared to a total of 4.6 million private rental households. However, the sector has increased threefold in the last five years.1 A sub-sector of the private rented sector, BTR is attracting new investors seeking to capitalize on the growing demand for high-quality, professionally managed rental properties. Rental demand in the UK is being driven by a combination of favorable demographics and structural change. Despite this, the BTR sector remains fundamentally undersupplied. Several factors are shaping the current environment, and in our opinion are expected to create opportunities to develop quality rental housing in return for durable income streams and a strong opportunity for appreciation.

1. The UK has consistently failed to meet house building targets, resulting in a housing supply gap the size of London. This has led to strong house price inflation, which combined with elevated mortgage interest rates has pushed home ownership out of reach, pushing many towards renting for longer.
2. The UK BTR sector is nascent but is attracting strong investor demand. We see limited risk of oversupply, with rental demand underpinned by favorable demographics and structural changes happening both in consumer acceptance and lifestyle choices.
3. We see an opportunity for investors to develop high-quality, professionally managed rental accommodation in a market where rental growth and occupancy remain strong.