A new report released by Savills states that the residential property market is resilient and that the Build to Rent (BTR) is primed for further growth. The report says that Q3 2020 saw a record £1.84bn invested in UK BTR, as strong occupancy and rental collection underscored the attraction of the sector.

Lawrence Bowles, director of residential research at Savills and co-author of the report, says: “In spite of the challenges 2020 has presented, the UK Build to Rent (BTR) sector continues to provide resilient income returns. Occupancy levels remain high and rent collection rates are still robust, in contrast to many other real estate sectors. Little wonder, then, that investor appetite and pricing for BTR assets have stayed strong through 2020. The third quarter of 2020 was the strongest single quarter of activity on record.”

BTR investors have reported robust occupancy levels over the last two quarters. Legal & General Investment Management initially reported a 9% occupancy fall in June as overseas students returned home, but occupancy has since recovered. Grainger’s occupancy was 95% in the year to September 2020.

The Savills residential management team says that rent collection has remained resilient too collecting 97% of rents due in Q3 from the more than 3,000 homes they manage. Grainger collected 95% of its rents in September, and even reported annual rental growth of 2.5%. The PRS REIT also recorded a 100% rent collection rate in the three months to September.

This compares exceptionally well to other real estate sectors, some of which are dealing with rent collection rates well under 50%. That resilience has supported pricing in BTR even as yields in other sectors soften. Net initial yields for operational BTR stock continued to narrow in all major markets in the first three quarters of 2020. This stability in the face of pandemic disruption has reinforced BTR’s appeal to investors seeking long-term, reliable returns and £3.1bn was invested in BTR in the year to September 2020.