Build To Rent tipped for long-term success despite sharp fall in 2020

10 July 2020 | Renting

 Build To Rent tipped for long-term success despite sharp fall in 2020

Property consultancy CBRE claims that Build To Rent is likely to be the most resilient sector of the UK property industry in the coming years – and this is despite a downturn in 2020.

CBRE has tracked investment into BTR since the sector emerged in 2015. 

After a strong start to the year, with over £1 billion of investment in new projects in the first quarter of this year, it has joined all other sectors of the property industry in seeing a major downturn in the second quarter. 

Even so, CBRE says some schemes are moving forward.

These include a £125m scheme in Birmingham from Court Collaboration, and a 440-apartment project – again in Birmingham – from Taylor Grange. Amro Real Estate also has plans for 278 homes at Ealing in west London.

The consultancy says there is a substantial investment pipeline with just over £1.4bn worth of deals currently under offer. This is broadly equivalent to the investment pipeline at the end of 2019, which then translated into £1 billion of investment in Q1 2020.

Scott Cabot, CBRE’s associate director of research, says: “It’s little surprise that there was a sharp downturn in investment in Q2, as the lockdown halted activity. But this period has also highlighted the resilience of the … sector. Rent collection rates have remained high, and historically rents have declined less and recovered quicker during downturns, giving investors some confidence to proceed. 

“With £1.4bn of deals currently under offer, we anticipate a rebound in … investment in the second half of 2020, and a return to growth in 2021.

“While we may see modest rent falls in 2020, we expect the sector to return to growth in 2021 and outperform other sectors.”

This post has originally been featured in Letting Agent Today.