Investment in purpose-built rental accommodation in the UK is set to reach £146 billion by 2025.
£750 million of this investment has been provided by a US property fund, continuing a trend of global investment into the UK property market, despite of Brexit jitters.
Despite wider economic concerns, housing continues to be seen as a solid investment. It is predicted that by 2025, demand for rental property in the UK will reach six million.
Traditional buy-to-let homes are no longer able to meet housing demands, and increased demand for a new way of living has made way for the build-to-rent sector to grow rapidly in recent years. JLL now estimates that 125,000 build-to-rent units in the UK have now been completed, are in construction, or are in the pipeline.
A greater demand for homes has helped to drive investment, particularly from companies based abroad. Between January and March of this year, institutional investors used £1.04 billion to invest in build-to-rent projects.
London and Bristol are emerging as two of the biggest hotspots for purpose-built accommodation. Investment opportunities include co-living, senior living and purpose-built student accommodation.
In London, expected annual rental growth in student accommodation for the next five years is 3.2%, compared to 2.4% in the regions.
Senior living is also growing in the capital. In the next five years, senior living rental growth is expected to be 3.5% in London and 3.2% in the regions.