Build-to-rent continues to dominate construction market in London


The popularity of purpose-built rental stock continues to flourish across the UK, but the biggest market for it is still in the capital.

New analysis released by Knight Frank in its London Residential Development report for H2 2019 has revealed further growth in the “investment-grade private rental sector (PRS)” in London, with demand from international institutional investors growing strongly.

In the first half of this year, build-to-rent developments – which are constructed for the sole purpose of being rented out to private tenants – of 100 or more units accounted for almost a third (28%) of construction starts. This is up from 21% in 2015, demonstrating how the build-to-rent sector is still gaining traction with no sign of it slowing down. Developers as well as investors are striving to meet the growing demands of tenants, whose needs are changing as they expect more amenities and better quality accommodation options – all of which can be found with build-to-rent.

International investment in build-to-rent

Institutional investors from North America, Asia, the Netherlands, Israel, the Middle East and Australia are all getting increasingly involved in the space, according to Knight Frank, while figures from RCA show that in the year to July 2019, more than £800m was invested into 100+ unit developments in the build-to-rent sector in Greater London. During the first six months of this year, 6,816 units were approved in developments of this size, which is a more than 20% year-on-year increase.

Knight Frank’s yield guide shows investors can achieve 3.5-3.75% in Zone 2 prime, 3.75% in Zone 3-4 prime, and 4% in Greater London prime.

Top spots for build-to-rent

Last month, separate research from JLL revealed that London was one of five cities in the UK that had made it into the top 20 European cities for build-to-rent investment, with the capital claiming fourth place with more than €2bn invested there in 2018.

The other UK cities competing in the purpose-built rental accommodation space were Manchester, Leeds, Birmingham and Brighton, all of which have soaring levels of construction activity and build-to-rent projects taking place to meet the growing demands of tenants in the cities. As the number of renters is forecast to surpass homeowners in the future in the UK, the importance of the build-to-rent sector will continue to grow.

BuyAssociation works with a number of developers who offer a range of build-to-rent investment opportunities across the UK. Go to our investments page to see some of our projects or get in touch for more information.

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

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


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

Build-to-rent continues to dominate construction market in London


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.