For a market that is still new and consistently growing, here are our 5 key facts for how and why:
1, Purpose-built BTR/PRS housing is only a recent concept, with just over 51,000 dwellings completed across the UK as of Q3 2020. This equates to only around 1% of total PRS stock.
2, In Q1 2020, a large number of schemes completed, driving up the volume of operating units by 42% on Q1 2019, equating to an additional 13,000 homes. In Q2 2020, the impact of the first Covid-19 lockdown was sudden, with only three funding deals, worth £96m and with just 1,800 starts across a dozen sites.
3, The build to rent sector has seen an influx of institutional investors enter the market in recent years as the focus for investment propositions moves away from the High Street retail and into developments that are likely to provide a higher return.
4, Population growth, a younger mobile workforce, increasing house prices, tighter mortgage requirements by lenders – and declining levels of social rent housing – have led to a worsening shortage of affordable build-to-sell housing, particularly for first-time buyers in the 25-34 age group.
5, Several larger housing associations have also diversified into the PRS. Due to budget cuts to housing, they have had to find other income sources e.g. through developing housing for sale and private rent.
