Despite almost 14,000 build to rent units having already been completed in the UK, plus more than 50,000 currently under construction, this is only the tip of the iceberg according to Lambert Smith Hamptons (LSH).
In its recent ‘Build to Rent – Reaching out to the regions’ report, the firm says that the build to rent (BtR) industry will increase eight-fold in size by 2020. The report states: ‘Considering the huge momentum in BtR, activity to date has been relatively modest. Since the start of 2015, actual deployed capital to BtR stands at circa £6bn, including investment transactions as well as directly invested equity. Yet this pales in comparison with the capital currently committed to BtR that is yet to be deployed. Indeed, we estimate that for every pound invested in BtR to date, another eight pounds will be deployed by 2020.’
Considering so much of the current activity (completed and under construction) has been in London, which accounts for 56% of all units, and the forecast is for build to rent to expand more rapidly into the regions, which is much cheaper to build, just how many units would an eight-fold rise in investment create? At the current rate of capital deployed per unit built/being built, it would result in 512,000 more units either built or under construction in just over three years time.