London is growing in its importance as a Build To Rent market according to new research released today.
International property consultancy JLL says investment volumes in Build To Rent in London nearly doubled last year to €2,030 million, up from €1,100m in 2017.
Activity in London has boosted to a huge €6.8 billion the size of the wider UK Build To Rent sector, which JLL refers to as ‘Multifamily’ - the US term for Build To Rent.
London has jumped two places to become the fourth top European city for BTR investment in JLL’s European Multifamily Investment Market report and it is one of five UK cities in the top 20.
Manchester holds the number 11 position with investment volumes of more than €700m, followed by Leeds, Birmingham and Brighton - numbers 15, 16 and 17 respectively.
JLL says this is particularly important in the context of heightened market uncertainty and follows recognition by policy makers, developers, planners and investors that BTR offers a practical solution to the UK’s housing crisis.
“Residential investment in the UK has had a breakthrough year, at least in the European context. It is a signal of how far this market has progressed in five short years. This has cemented the UK’s place as a leading European hub for residential investment” explains report author Philip Wedge-Bernal, JLL’s Living Research & Strategy.
“Both in the UK and across Europe, multifamily assets offer a significant opportunity for investors to diversify their real estate portfolios. The sector’s historical performance as a defensive investment is likely to attract even greater attention from investors seeking stable cash flow and diversification benefits.
“The outlook for the year ahead remains broadly positive, especially once current political uncertainty begins to clear. Regulatory changes represent an ongoing risk that could undermine further investment, however. We anticipate that volumes and pricing will remain stable until these issues are resolved.”
And Adam Challis, a JLL research chief, adds: “Long-term shifts in demography, such as shrinking household sizes and longer, healthier lives are combining with continued urbanisation to create a chronic undersupply of appropriate homes across European cities.”