Property consultancy Knight Frank has launched its Q3 2024 market update for the UK’s Build to Rent sector. The report highlights that investment in the UK’s Build to Rent sector reached £640m in the third quarter of 2024.
Total investment in the sector in 2024 has reached over £3.2bn, representing a 20% increase compared to the same period in 2023.
65% of investment over the course of the quarter was for multifamily transactions, with the remainder for single-family assets, according to Knight Frank.
35% of capital deployed was into operational schemes, up from just 20% in the first half of the year. This reflects an increase in opportunities to acquire stabilised schemes.
“Investor appetite for Build to Rent assets remains strong. We are currently tracking £1.6bn worth of transactions under offer or nearing completion, with 84% of these focused on multifamily schemes. The pipeline for Build to Rent remains strong, with nearly 60,000 homes under construction and another 102,000 with full planning permission.
“In addition to investment and supply, our Build to Rent Rental Index also sheds light on rental growth trends.
“Our analysis shows that annual rental growth for Build to Rent properties has eased to around 3% in markets outside of London, and slightly below that in the capital. This moderation follows years of record-high growth and reflects a more sustainable long-term relationship between rents and earnings growth.”
Lizzie Breckner, Head of Build to Rent Research, Knight Frank
Knight Frank also recorded a wave of recapitalisations and equity raises during the quarter – deals that were not reflected in the headline investment figures.
Among these was a £755m preferred equity commitment between Ares and Lone Star at Wembley Park, a deal advised by Knight Frank.
The report also found that over 18,000 Build to Rent homes have been completed so far this year, almost reaching the record 19,000 built in 2023.
“The £3.2bn transacted year to date underscores the long-term attractiveness of Build to Rent as an asset class.
“The sector continues to be regarded as resilient and scalable, offering strong opportunities for growth in both urban and suburban settings.
“Additionally, this quarter we have witnessed a notable increase in completion volumes, putting the sector on track for a record year in terms of new delivery.”
Jonny Stevenson, Head of Build to Rent Forward Funding, Knight Frank
There are now 122,238 completed Build to Rent homes across the UK within co-living, single-family housing (SFH) and multifamily developments.
A further 58,951 are under construction and 101,729 have full planning permission granted, taking the total size of the sector to 282,918 homes.
Supply continues to build in regional markets, with Knight Frank reporting that 67% of completions so far this year are outside of the capital, led by Manchester and Birmingham. In total, 68% of the pipeline is located outside of London.
