Investment into the build-to-rent sector this year reached its highest Q1 level since 2022, with £500 million being allocated into multifamily schemes.
Savills data shows that 12-month investment from international capital has outpaced that from domestic sources, indicating that international investors are targeting the UK private rented sector.
Notable transactions included Hill & Peabody’s forward funding transaction with Goodstone in Dagenham; Legal & General’s partnership with Japanese developer Nomura to deliver over 1,000 UK rental homes.
Their joint venture acquired its first Central London plot in Herne Hill, Lambeth, to develop more than 200 homes. Additionally, CompassRock entered the Bristol market, purchasing 295 apartments at Stafford Yard, marking the city’s first BTR transaction since 2002.
Polly Simpson, head of multifamily development, Savills OCM, said: “With over £800 million invested in Q1 this year, following a record-breaking Q4, and growing demand for high-quality rental homes amid limited supply, the sector is seeing continued growth.
“It’s great to see so many forward funding transactions in a single quarter, testament to continued investor interest in delivering new, high-quality homes across the UK which is a trend we expect to continue for the remainder of the year across multifamily and single family developments.”
According to Savills, in 2024 18,000 BTR homes were completed, accounting for 8% of new build completions across England and Wales – up from 5% in 2019. Despite this rapid growth, BTR still represents only 2% of the UK PRS, demonstrating the sheer scale of opportunity for the sector.
While BTR accounts for a greater share of the PRS in some UK cities, it remains far lower than in international markets, particularly the USA. For example, nearly 25% of PRS stock in Manchester is BTR, compared to 43% in Detroit and 74% in Charleston.
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