As structural warranty specialists, we are regularly called upon to provide latent defects cover for build to rent (BTR) developments, and we’ve seen the popularity of such developments grow over the past decade.
This week, we read that despite the impact of the coronavirus pandemic, a record £4bn is set to be invested in developing new build to rent homes in the UK in 2020.
As reported by Housing Today, research from estate agent Knight Frank predicted that £4.02bn will be spent on building new purpose-built rented homes this year, up more than a third from the £2.83bn spent in 2019, and above the previous record high of £3.7bn in 2018.
The growth of the BTR sector in 2020
Here at Advantage, we’ve previously written about the growth in UK house prices in 2020, and how SMEs in the construction sector have reported a bounce back in workloads this summer. All of which provides some degree of comfort while other sectors face a challenging autumn ahead.
Within the construction sector, housebuilding and BTR developments have proven particularly resilient. Knight Frank said its research showed that there are now just over 46,000 purpose built rented properties in developments of more than 75 homes in the UK, with a further 84,000 under construction or with planning consent.
In total, it said, £41bn of capital had been committed to the sector in the UK to date, up from £35bn in 2019. At least £2.7bn had been spent in 2020 so far, it said.
The long-term opportunity afforded by the BTR sector
James Mannix, head of residential development and investment at Knight Frank, said the investment had come from both new and established market players and was “testament to the long-term opportunity afforded by the sector.”
The report claimed the lockdown period had demonstrated the resilience of the build to rent sector, with rent collections not dropping significantly as some had feared, averaging 95.2% between March and August.
The figures come as one of the UK’s biggest build to rent investors, the PRS Reit, published full year results and a first quarter trading update showing an accelerating delivery of its pipeline of new build schemes.