The first quarter of 2025 saw the highest level of investment in UK Build to Rent (BTR) for any first quarter since 2022, says Savills.
Over £800m was invested, following on from what the agency describes as a record breaking Q4 2024.
In Q1 2025 over £500m was allocated to developing so-called ‘multi-family’ schemes in urban locations, reversing the recent trend of more limited activity in forward funding of large-scale developments. Savills says that for the fourth consecutive quarter, 12-month investment from international capital exceeded domestic sources.
The agency – which has been a long-time cheerleader for Build To Rent – claims that international investors are increasingly targeting the UK private rental sector because of its supply shortages, affordability constraints, rising rents and long-term demand.
Notable transactions included Hill & Peabody’s forward funding transaction with Goodstone in Dagenham; Legal & General’s partnership with Japanese developer Nomura to deliver over 1,000 high-quality UK rental homes. Their joint venture acquired its first Central London plot in Herne Hill, Lambeth, to develop more than 200 homes.
And CompassRock entered the Bristol market, purchasing 295 apartments at Stafford Yard, marking the city’s first BTR transaction since 2002.
According to Savills, in 2024 some 18,000 BTR homes were completed, accounting for 8% of new build completions across England and Wales – up from 5% in 2019. Despite this rapid growth, BTR still represents only 2% of the UK PRS, demonstrating the sheer scale of opportunity for the sector. While BTR accounts for a greater share of the PRS in some UK cities, it remains far lower than in international markets, particularly the USA. For example, nearly 25% of PRS stock in Manchester is BTR, compared to 43% in Detroit and 74% in Charleston.
A Savills spokesperson says: “With over £800m invested in Q1 this year, following a record-breaking Q4, and growing demand for high-quality rental homes amid limited supply, the sector is seeing continued growth. It’s great to see so many forward funding transactions in a single quarter, testament to continued investor interest in delivering new, high-quality homes across the UK which is a trend we expect to continue for the remainder of the year across multifamily and single family developments.”
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