Big fall in Build To Rent investment but backers insist future is bright

Investment into the purpose-built Build To Rent sector in the UK dropped significantly last year.

Some £273.8m was invested in the fourth quarter of last year bringing the total investment in 2019 to £2.4 billion according to research from the consultancy CBRE. This is down a hefty 22 per cent from 2018.

However, CBRE insists the outlook for this year is “favourable” with some £1.5 billion worth of deals currently under offer.

The majority of transactions in Q4 were forward funding deals, with the remainder in portfolio sales. Investment was approximately evenly split between London and the regions.

“Transactions for the second half of 2019 have been subdued compared to the last two quarters of 2018, most likely as a result of market uncertainty around the General Election” says James Hinde, the director of valuation and advisory services at CBRE. 

He insists “there are some very significant deals throughout the UK, but particularly in the regions, with due diligence well progressed, which suggests that 2020 could be a record year for investment.”

Hinde forecasts “rapid expansion” and CBRE’s forecast is for residential investment to rise by approximately 30 per cent this year, with demand driven by “an increasingly diverse investor base from both domestic and overseas institutions.”

In addition CBRE foresees “a subdued sales market” - although it makes no comment on recent forecasts of a significant recovery in sales as a result of greater political and economic stability post-General Election.