Being heralded as the answer to the UK’s housing crisis, there is no wonder that the flourishing Build-to-Rent sector is such a hot topic at the moment. As the demand for privately rented accommodation continues to increase across the UK, you may have seen, or even be one of the investors behind the high-quality apartment blocks and housing units cropping up here, there and everywhere.
In this blog post, we’re exploring the top and growing Build-to-Rent hotspots here on our small-yet-very-busy island, and why London may not be the UK’s number one Build-to-Rent hotspot for much longer.
A rapidly growing sector
The UK Build-to-Rent sector has seen massive growth over the last year alone, with there now being just over 148,000 Build-to-Rent homes completed, in planning or under construction across the UK. This is an impressive 20% rise on the same period last year, with the number of completed Build-to-Rent units also increasing by 31%.
Five UK cities make the European top 20
A Build-to-Rent heavyweight Germany (£15.9bn) is the market leader with the highest industry investment, the UK (£5.8bn) and the Netherlands (£4.9bn) combined makeup £10.7bn investment - one third less than Germany.
However, it is exciting to know that London is now one of the most progressive cities in Europe when it comes to investment in Build-to-Rent assets. In 2018, in the capital city alone, activity in the sector amounted to more than £1.7billion, with total investment volumes in the UK surging by over 150% to £5.7 billion in comparison to the previous year.
London took fourth place in the top 20 European cities for Build-to-Rent investment according to the European Multifamily Investment Marketing report.
Four other UK cities also made it into the top 20 too, showing the rapid growth in these areas as well. These cities, along with their respective investment volumes, are:
- Manchester – over £612 million
- Leeds - £342 million
- Birmingham - £282 million
- Brighton - £278 million
As can be seen from the figures above, Build-to-Rent is really beginning to boom all across the UK, with London taking first place and centre stage.
However, it looks like London could soon be hit off the top spot as more and more people continue to leave the capital for a cheaper and much better standard of living elsewhere, resulting in investors taking their money and putting it into those, now, more desirable areas.
London vs. the rest of the UK
This is proven to be true in the Build-to-Rent Q3 2019 report prepared for the British Property Federation. In this report, it was announced that there are 148,046 Build-to-Rent units either completed, planned or under construction in the UK.
However, it is interesting to note that the division now between London and other regions across the UK is heading towards more of an even split, with London accounting for 51% of this number with a total of 75,747 units, whilst the rest of the UK amounts to 72,299 units, making up the remaining 49%.
Regional cities are expected to soon surpass London in terms of Build-to-Rent numbers, particularly in the larger cities of Manchester, Leeds and Birmingham. With Greater Manchester being home to MediaCityUK, and with Leeds recently becoming Channel 4’s new dwelling - as well as an important hub for Sky and NHS Digital - increasing numbers of new graduates are choosing to stay on in these cities rather than making the once-traditional move to the capital city.
How Movebubble can help you
Here at Movebubble, while observing the landscape and being a part of the Build-to-Rent sector since the beginning, we’ve noticed that although there are a lot of Build-to-Rent properties out there, there is no simplified way for potential renters to find out more about them.
This is where the Movebubble app comes in to play! Movebubble One focuses on high-quality Build-to-Rent accommodation in London and Manchester, making it easier for renters to find out all they need to know about a Build-to-Rent home. Simultaneously, we present Build-to-Rent providers with opportunities for discoverability to potential renters through our app, making it a win-win situation for all.
To find out how you can partner with us as a Build-to-Rent provider, please contact us today.
Change is coming
It is safe to say that Build-to-Rent is becoming an appealing option to many young professionals, and with higher-paying jobs becoming more evenly distributed across the UK, it appears that Build-to-Rent options are following suit.
We’re excited to see how many more investors will choose to further take on these new customer demands and invest outside of London, accelerating more change in the Build-to-Rent sector in the coming years. Will London be knocked off the number 1 spot? We’ll have to wait and see.