A prominent consultancy advising the Build To Rent sector has identified one British city as the prime location for investment in 2022.
BNP Paribas, which owns the Strutt & Parker agency as well as being a major commercial and residential consultancy in its own right, says Bristol and surrounding areas “make a compelling case for investors” in the coming period.
BNP puts the plus points of the west country city as being its two universities, strong transport links to London as well as its own international airport, and a number of industry clusters including creative and digital, and the fintech sector, as well as having a strong professional and financial services presence too.
So far there are some 800 completed Build To Rent units in the city with another 2,000 in the pipeline, most expected to complete by 2024.
BNP says the demographics also support the growth in BTR in the city. The population is expected to grow 5.9 per cent over the next 10 years, compared to 4.2 per cent in England. In particular the 25 to 44 years old age group is expected to grow well above the national average at 6.1 per cent over the same period.
There is also a higher than average proportion of households in the private rented sector (currently 20.8 per cent) whilst home ownership is below the national average, at 58.8 per cent.
Housing affordability in Bristol has impacted on home ownership levels. Average house prices, at £280,000, are above the national average, and similarly, the ratio of house prices to earnings in Bristol is also greater than the average for England, at 8.59.
Joshua Gunn, head of the Bristol office of BNP Paribas Real Estate comments: “Bristol has a wonderful sense of identity, one of the key factors that makes it such an attractive place to both live and work.
“The city and surrounding areas is one of the UK cultural and innovation hotspots, and this is translating into an increasingly attractive BTR proposition.
“Industries are thriving, the population in booming at a rate above the UK average, and wages are highly competitive. Even the pipeline of BTR will not be sufficient to satiate the thirst of market demand where more than a fifth of households rent. All signs point to Bristol as the city that should be top of investor’s watchlist for opportunities going into 2022.”
And Rebecca Shafran, alternative markets research associate director for the company, adds: “The rise in the Build to Rent sector outside of London continues to be in the spotlight for investors who are keen to identify new opportunities in and around regional cities. Bristol certainly makes an interesting proposition for those investors, where the fundamentals of strong demand and short supply are underpinning sector growth.
“The city also benefits from its reputation as vibrant, aspirational, and with a fierce sense of community. Post pandemic, people are reassessing their priorities and the ability of Bristol to deliver on career ambitions and work/life balance is huge upside factor.”