A report by Knight Frank has revealed the unstoppable growth of the build-to-rent sector. They predict the sector will be worth a massive £146billion by 2025, after being worth just £87.3billion in 2019. This makes it a great choice for a beginner property investment.
A varied sector
The build-to-rent sector is not only large, it’s varied. This makes it a great choice for both a beginner property investment or for someone looking to add to their existing portfolio.
Comprising of investment-grade build-to-rent and private rental sector schemes, as well as student accommodation and senior living programmes, the build-to-rent sector has an investment opportunity for everyone.
This also makes it especially resilient to market trends and wider economic fluctuations. Despite the global pandemic and multiple national lockdowns, various build-to-rent projects have flourished over the past year. Some of the most exciting are Manchester’s Albion Place and Phoenix in Leeds.
Investment-grade build-to-rents lead the way
The investment-grade subsector of the build-to-rent market is performing especially well. In fact, it is soon expected to overtake the student accommodation subsector, which itself is worth £65billion.
The investment subsector is especially attractive for beginner property investments. These investment properties are build-to-rent accommodation that are usually sold off plan, giving investors plenty of choice in property and payment options. They’re often also lower cost, therefore generating higher returns.
No slowdown in sight
With such high growth forecasts, there is certainly no slowdown in sight for the build-to-rent sector. Rising populations and an undersupply of housing means property prices are ever increasing.
High house prices mean many first-time-buyers are delaying their purchase and turning to renting while they save more money for their first home. As investment-grade build-to-rents are often in desirable locations with fantastic amenities, they are the obvious choice for such tenants.
So as property prices increase in the wider market, so does demand for good quality rental property. And with that the value of the build-to-rent sector rises too.
Booming market outside of London
More and more build-to-rent developers are setting their sights outside of London. Regions such as the West Midlands, Yorkshire and the East Midlands have all seen huge increases in the numbers of build-to-rent homes available for investment.
And the coronavirus pandemic doesn’t seem to have damaged these regional markets at all. Tenant demand has actually increased during the three lockdowns, with people looking for better quality housing with good amenities. All of which are offered by build-to-rent properties.
Buyer demand has also increased, especially from beginner property investors. These unfamiliar times have led people to make less risky financial investments, which includes build-to-rent properties.
Find out more
Whether you’re an experienced investor or are making your beginner property investment, to find out more about the build-to-rent sector contact North Property Group today.