Build to Rent is set to eventually swallow up a third of the private rented market, research by Savills has revealed, as the sector witnesses huge growth over the next five to ten years. The claim is made within research released today by the estate agency’s investment arm. It estimates that 1.741 million households out of a total of 5.2 million within the private rented sector will be occupied by tenants living in build-to-rent developments by the time the sector ‘matures’, up from 30,000 today. The build to rent sector will also rise in value from £9.6 billion in 2019 to £543 billion at maturity in today’s money, a third of the PRS’s £1.5 trillion potential value. The company won’t say when maturity will be reached, but the student housing market, which Savills says it now saturated with supply, has taken approximately ten years to develop. This huge surge in build-to-rent investment and building is driven in part by the exit of individual landlords from the private rented sector, 100,000 of whom have quit since recent tax changes were introduced, Savills says. “Private renting is not a new concept in the UK, but large-scale, institutional investors have only begun to make their mark on the sector over the past few years,” says Peter Allen, Head of Savills Operational Capital Markets (left). The company’s report, called UK Operational Real Estate: The Sky’s The Limit, also says the retirement accommodation sector is set for significant growth too and will double in value from £121 billion to £265 billion and add 537,000 homes to the stock.
As many as 1.74 million households out of a total 5.2 million private rentals will be within the build-to-rent (B2R) sector within a decade, compared with the current figure of 30,000, according to research from Savills. The sector will grow from £9.6bn ($12.2bn) this year to £543bn when the market matures. The report also predicted that the retirement housing sector will grow from £121bn to £265bn, with more than half a million new homes added.