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Build-to-Rent Investment Market Predicted To Reach £550 Billion

Student accommodation and retirement living likewise expected to see significant growth in the coming years

Residential operational real estate market in the UK set to growth to £880 billion once it reaches full maturity

The residential operational real estate market in the UK is set to quadruple once it reaches full maturity, according to a new report by global real estate services provider Savills.

Encompassing student accommodation, residential retirement living, and the build-to-rent sectors, the report suggests residential operational real estate is still in its infancy, valued today at around £223 billion.

However, by the time the market reaches full maturity, it will have grown by nearly four times to £880 billion.

Full maturity is defined by Savills as a market driven by brand rather than innovation, dominated by a handful of larger businesses, with fewer new entrants and profits being distributed to investors.

Whilst appetite is already strong, Savills predicts it will grow significantly as investor knowledge in underlying demographic drivers will fuel additional interest.

Of the three, student accommodation is regarded as the most mature sector, currently valued at £50 billion.

However, the build-to-rent and residential retirement living markets have substantial room for growth, driven by new supply and innovative products and tenure structures, with the build-to-rent sector predicted to reach £550 billion at full maturity, up from £10 billion today, whilst the amount of stock available will jump from 30,400 to 1,740,900.

Similarly, the residential retirement living market is expected to scale up from a market valued today at £120 billion to £266 billion, as competition intensifies with new entrants developing new products and attract end-users with brand awareness.

The report concluded with: “Growing these sectors to full maturity will require investors to hold their nerve in the face of political headwinds and economic uncertainty. Overcoming those challenges, however, will increase the value of these sectors fourfold to £880 billion.

“That is an opportunity worth getting excited about.”

Additional property wealth in Britain has grown by 54% over the last 20 years to almost £1 trillion, new research by the Resolution Foundation reveals.

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