Single-family housing leading the BTR sector
Single-family housing is standing out as a growth area for the UK’s build-to-rent market as construction across the sector slows.
The latest BTR figures from Cushman & Wakefield show single-family housing accounted for 9,626 completed homes, 9,122 under construction and 9,187 in planning in the second quarter of this year.
Single-family housing accounted for 47% of the total £800m invested into the BTR market during the quarter (down from £900m invested in Q2 2022), thanks largely to two major disposals by housebuilders: Barratt’s sale of 604 homes to Citra Living for £168.4m and MJ Gleeson’s sale of 288 homes to Carlyle and Gatehouse for £50.4m.
Single-family housing is standing out as a growth area for the UK’s build-to-rent market as construction across the sector slows.
The latest BTR figures from Cushman & Wakefield show single-family housing accounted for 9,626 completed homes, 9,122 under construction and 9,187 in planning in the second quarter of this year.
Single-family housing accounted for 47% of the total £800m invested into the BTR market during the quarter (down from £900m invested in Q2 2022), thanks largely to two major disposals by housebuilders: Barratt’s sale of 604 homes to Citra Living for £168.4m and MJ Gleeson’s sale of 288 homes to Carlyle and Gatehouse for £50.4m.
Cushman & Wakefield said it expects to see further, rapid growth in single-family housing as housebuilders look to offload schemes due to a weaker sales market as mortgage affordability bites.
Average monthly mortgage payments in the UK are now 17% more expensive than rents, while in London they are 29% higher, making BTR properties a more realistic prospect for occupiers.
Millie Todd, head of living research at Cushman & Wakefield, said: “Traditional housebuilders are continuing to explore the BTR sector, with a number looking to de-risk some of their existing schemes as they see individual sales slow by selling block opportunities to active investors.”
More broadly, there are now 88,100 completed BTR homes, up by 13% on last year. However, there has been a slowdown in construction in most regions due to current economic headwinds, such as the cost of borrowing which is complicating deal structuring.
Mark Clegg, head of residential capital markets at Cushman & Wakefield, said: “Overall, the investor rational for BTR remains strong and money remains committed to the sector. However, cost of debt and a changing construction environment, is temporarily dragging the pace of investment.”
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