Investors are committing more money than ever to private rented sector


Specialist property investment in the UK increased by 40% last year compared to 2016 to reach a record £17.7bn, with investors spending the most in the country’s rapidly rising private rented sector.

The latest research from Knight Frank, The Human Factor; Specialist Property, has revealed strong performance levels in last year’s specialist property sector investment, which accounted for more than a quarter (27%) of the UK commercial property market.

While four of the five specialist property sectors saw higher investment volumes than in 2017, the largest share of the investment went into the country’s private rented sector (PRS), which received £6.3bn worth of backing from investors over the course of the year. Around £0.5bn was invested in automotive, £1.3bn in healthcare, £5.5bn in hotels, and £4.1bn in student property.

Why is the sector so popular among investors?

A number of issues have driven the increase in demand in the PRS for investors. These include the depleting levels of homeownership across the country resulting in more people renting instead, smaller scale buy-to-let investors selling properties leading to a reduction in stock, and general lack of provision of properties combined with population growth pushing up demand.

The report says: “Despite seeing strong growth in recent years, PRS housing remains a tiny proportion of the UK’s overall rental market.

“We see significant scope for investors able to create or back PRS ‘brands’ which prioritise flexibility towards tenant needs and offer superior levels of service and professionalism.”

There are also opportunities to be had in city centre locations for rising number of young professionals, and the report says micro-apartments and co-living concepts will “enhance affordability”.

The benefits of investing in PRS

Income generated from the private rented sector is long-term, secure, and “typically diversified across a high number of tenancies” for many investors.
[crb_image link=”” image=”” align=”left”]
Furthermore, it is still an emerging market in the UK as investment levels and developments continue to increase, and therefore now is the best time to start investing and identifying the top opportunities, while demand continues to outpace stock levels.

Knight Frank predicts that PRS investment is set to grow significantly over the next five years, with total investments hitting as much as £70bn by 2022, with an additional one million households in rented accommodation – and investment from both the UK and abroad will drive these numbers.

“The fastest pace of growth will be seen in the market for single family housing, which caters to the rapid growth in the 35-55 demographic,” adds the report.

CityGreens, Solihull, Birmingham

City-style apartments directly on Birmingham's largest park

  • Limited pre-launch prices.
  • ZERO ground rent
  • Excellent tenant demand

£182,000 - £419,000

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free


Investors are committing more money than ever to private rented sector


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.