The areas of the UK property market with the biggest potential for Build-to-Rent investors have been highlighted in a new study by Ascend Properties.
The Manchester-based estate agent reveals that the Build-to-Rent sector has received almost £16bn in investment so far, and this is forecast to hit £25bn by 2025. The research analyses the number of private renters across 15 major cities and what this equates to as a percentage of total dwellings, to find where the greatest demand is for rental homes.
It shows that some 4.7m people in England live in privately rented property - equating to 19.4% of all dwellings nationwide. However, there is a greater tendency to rent across major cities, and in some cases, up to a third of a city’s dwellings are in the private rental sector.
The greatest Build-to-Rent potential for investors can be found in Manchester, with private rentals accounting for as much as 30.7% of the city’s property stock. Meanwhile, the highest volume of rental stock can be found in London, with over one million homes in the private rental sector, accounting for almost 29% of all dwellings in the city.
London and Manchester were followed by Southampton at 26.2%, while Bristol and Nottingham completed the top five at 26.1% and 26% respectively. The research also revealed that Liverpool, Portsmouth, Leicester and Bournemouth also rank high, with 25% or more of the population living in privately rented homes.
Ged McPartlin, managing director of Ascend Properties, said: “All too often we see property investment focussed around the next ‘up and coming’ location but where the rental market is concerned, success hinges on tenant demand and the ability to maintain a consistent stream of rental income. In this respect, following the crowd is a smart move and the percentage of a population already residing within the rental sector is a key indicator of where demand is at its highest. It’s an exciting time for the Build-to-Rent sector at present with investment forecast to grow considerably over the next few years. Of course, this initial growth is only part of the journey and ensuring we deliver the right developments in the right locations is also an essential part of laying these foundations.”