The Build to Rent sector is one of the fastest-growing property formats in the UK, with supply increasing by 50% each year since 2015. The concept of BTR is already popular in the US and across Europe, and has been taking shape in the UK over the last decade. But what is Build To Rent, how fast is it growing, and can we expect to see more build to rent in the West Midlands in 2024 and beyond?
Build to Rent consists of large purpose-built rental accommodation funded by institutional investment. Many of the developments have a focus on lifestyle renting, with facilities such as on-site gyms, concierge, meeting rooms and shared working space.
Figures from Savills demonstrate that even though BTR has been steadily growing over the past decade, it is showing no signs of slowing down. Q2 of 2023 was the most impressive on record for BTR investment, with a staggering £1.26 billion being invested in the sector.
When it comes to BTR stock, industry estimates show that there are currently 88,100 completed homes across the UK, with over 53,500 in the pipeline awaiting completion. This isn’t to mention the 111,800 units that are in the planning pipeline ready to start construction. It’s no wonder predictions estimate that the sector will be worth £100 billion by 2028.
As for rental growth across the Build To Rent sector, statistics from 2022 to 2023 have shown 12 months of double-digit rental growth, totally eclipsing the pace of growth for PRS properties. Whereas BTR units are experiencing an average of 12% rental growth, private rental units are seeing 5% growth – although this is still impressive growth, it is evident that BTR units have even more appeal than their PRS counterparts.
What’s Happening With Build to Rent In The West Midlands?
Unsurprisingly, Birmingham is one of the UK’s key Build to Rent centres. With a young population, thriving culture, and opportunities which are pulling people away from the capital and towards the West Midlands, it’s no wonder Birmingham has attracted an abundance of interest from developers. New BTR schemes are beginning to take shape across the city – from Moda on Broad Street to The Landsdowne, to upcoming developments at Great Charles Street, Snow Hill and in the Jewellery Quarter. What’s more, with Birmingham attracting the most BTR investment over the last year outside of London, we expect the future to be bright for England’s second city.
There are a number of reasons for Birmingham’s Build to Rent boom. These include a young population looking for rental homes, a high number of startups, the relocation of a number of large companies to the city and a range of transport and infrastructure improvement projects. Huge schemes and projects such as HS2, the redevelopment of the Colmore Business District, and even the aftermath of the Commonwealth Games has seen swathes of searching tenants and buyers arrive in Birmingham, pushing up demand. It’s no wonder developers are so eager to take advantage of this boost in demand for viable rental units.
Meanwhile, over in Nottingham there has also been plenty of Build to Rent activity. Nottingham’s credentials are similar to Birmingham’s: it has a young population and thriving workforce, with two universities and lots of graduate workers looking for rental homes. All of these factors make Nottingham a prime investment hotspot for developers.
Its first Build to Rent development was Saffron Court – a 350-apartment project constructed by Winvic Construction with involvement from Cassidy Group and Cording Real Estate Group. The development has a range of two-bed and studio apartments, with tenants benefitting from facilities such as a gym and on-site grocery store.
That’s not all – the Barnum is currently under construction, bringing almost 350 new homes to the centre of Nottingham; a new BTR development is being proposed in Forest Fields; and the Island Quarter is still under construction.
As we can see, Build to Rent looks set to continue its rapid rise over the next few years, particularly in the Midlands cities of Birmingham and Nottingham.
Explore VICI By Centrick
It’s important for landlords, tenants and property developers to keep up to date with what is going on in the sector as it will soon account for a large proportion of the rental market. Here at Centrick, our VICI division is dedicated to providing BTR solutions you can rely on. From creating outreach campaigns, to onboarding tenants, building stable communities and optimising the performance of your development – here at VICI, we provide a truly comprehensive BTR solution.
Having been involved in bringing BTR schemes to life, and having launched BTR developments across the UK such as Sheffield’s Iron Yard scheme, VICI are at the cutting edge of providing BTR excellence across the UK. Want to find out more? Fill out the form below:
