Samir Salya on London’s popularity for build-to-rent investment

An interesting report from Knight Frank has concluded that London is the most popular city for investing on the build-to-rent sector. As a whole, the rented sector in the UK (which includes the build-to-rent market) is set to be worth £70 billion by 2021. And the capital city is set to absorb 65 per cent of the market investment, leaving just 35 per cent across other regions in the UK.

Institutional investment

The comprehensive research from Knight Frank also shows that institutional investment in the UK’s private rental sector is currently at £25 billion.

In addition, a survey of 10,000 people who currently rent property concluded that rent costs are, unsurprisingly, the biggest worry. Affordability has long been at the top of the list of concerns for tenants searching for rental property, and as the Brexit negotiations kick off and there’s no sign of economic recovery, this is likely to continue.

Projections for the next five years

The survey also found that around 68 per cent (almost seven in 10) of current renters in the UK still expect to be renting in 2021. It also looks like the largest demographic (young professional workers aged between 25 and 34) is set to increase slightly over the next five years, along with the under-25s living in rented property.

Consumer demand for flexible, affordable accommodation is unlikely to decrease, and the sector is well established as an important area for investment. This is due, in part, to its long-term potential, as its growth looks to continue.

The kinds of challenges within the sector include land supply and planning policy. These two issues need to be addressed by the government in the near future. It’s hoped that the government will recognise and address these issues and further encourage build-to-rent by assisting in finding suitable land for developments.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings, and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.