According to research conducted by Knight Frank, one of the world’s leading independent real estate consultancies, investment in the UK’s Build to Rent (BTR) surpassed £5 billion for the first time in 2024, and is the fifth consecutive record year for investment. The full year figure stands at £5.2 billion, up 11% on 2023. What this demonstrates is the continued confidence from investors in the sector and that the UK remains an attractive market for global capital, with Knight Frank disclosing that there was a 51% year-on-year increase in cross-border spend in 2024. We look more closely at the factors contributing to this growth and any challenges to overcome.
What is driving the demand
This boom in the BTR sector has been sparked by various factors, but is being propelled largely by the changing attitudes of professionals, who now see renting as a more long-term solution to their housing needs, as affordability challenges make home ownership increasingly unattainable for many of them.
Then there is the fact that BTR projects are purpose-built for long-term renting, and are modern and energy-efficient and often feature desirable amenities such as on-site gyms, laundrettes and shared spaces for socialising. BTR developments also tend to offer on-site management and maintenance, to help provide peace of mind and a more seamless and community-driven living experience. These make them a very attractive and possibly more secure alternative to what is offered by some private landlords.
Diverse housing options
More than 22,300 new BTR homes were completed in 2024, and encompassed co-living, multi-family and single-family housing, which now stands at over 126,000 homes, and is up by 21% year-on-year. A further 57,400 homes are currently under construction and 106,500 have full planning permission granted, taking the total size of the sector to 290,000 homes.
Growth in regional markets
Importantly, the supply also continues to grow in regional markets, with 68% of completions in 2024 outside of London, and being led by Manchester and Birmingham. The North West region accounted for 16% of completions, followed by the South East and the West Midlands. Scotland accounted for 10% of delivery in 2024.
Challenges to overcome
For those not in a specific middle- and higher-income bracket, affordability is likely to be an issue, which might deter them from considering BTR living. However, an increase in options for middle- and low-income renters, such as providing more limited amenities and making the accommodation more basic could be a solution to make it more affordable.
While planning restrictions might also have been an issue in the past, the new government is looking to prioritise tackling the current housing shortage and planning reforms are underway to potentially unlock opportunities.
What the future holds
BTR is transforming the UK rental market and is redefining what renting can look like in today’s housing landscape. If the current growth trend continues, it will become an essential element of modern society in the UK, helping to respond to current housing demands and setting a foundation for future developments.
With investment potential estimated at £100 billion, BTR will expand beyond major cities to regional hubs and ‘commuter locations’ such as Milton Keynes, Bedford and others. This will maintain demand and opportunities for developers and construction service providers, as the appeal of BTR increases for a growing population in the UK.
We can also expect to see BTR developments integrate more and more sustainable practices, considered and energy-efficient designs and the incorporation of smart home technology. These are set to make them very attractive to the renters of the future.
At the rpa:group, we have been working with our retail clients to explore BTR housing above their stores or on unused land. This is an opportunity to utilise brownfield sites, by making better use of potentially dead space above stores and turning these into much needed affordable homes. Many of our clients’ sites are in prime locations with accessible transport links, reducing commuting times and reliance on cars and therefore making potential residential development attractive to professional renters from the onset. On a social and economic level, BTR not only eases the housing shortage, but would also bring people back into town and city centres, revitalising deteriorating high streets.
About the rpa:group
With over 40 years of experience in the built environment, our team of experienced Chartered Architects, CIAT Technicians, Quantity Surveyors and Specialists are best placed to help with your next BTR scheme. We will ensure that any proposal made meets stringent planning and building regulations, offering peace of mind at every stage of the project life cycle.
As a multi-disciplinary practice, we offer a range of services, including initial feasibility and viability studies, technical packages to completion, supported by our experienced Design, Architecture, Project Management team.
If you would like our help or would like to know more, please contact Christine Lee RIBA Senior Architect on c.lee@therpagroup.com.
