A record £5.1bn was invested in the UK build-to-rent (BTR) sector in 2024, according to new data from Savills.
Total activity last year was 6% higher than the previous record high recorded in 2022, with more than half the full-year total committed in Q4 2024.
BTR accounted for 13% of total UK real estate investment in 2024, up from just 5% in 2021, with activity supported by a resurgence in investment from outside the UK. North American investors were particularly active, deploying more than £1bn in Q4 alone.
Single-family housing (SFH) also broke records, with investment activity of £2.5bn recorded in 2024.
Guy Whittaker, head of UK build-to-rent research, said: “Build-to-rent is set for another strong year in 2025 and it continues to play a crucial role in UK housing delivery, supporting regeneration and unlocking development.
“With the private rented sector making up a fifth of households in England, meeting the UK government’s target of 300,000 new homes annually will require a significant contribution from BTR. To deliver a fifth of new supply for private rent by 2030, there is a need for 60,000 new build rented homes each year, which will continue to drive investment in and growth of the sector.”
Charlie Bottomley, director, Savills Capital Advisors, added: “There is intense competition from lenders to deploy capital into the BTR sector and, as a result, we are seeing lower margins along with an increasing number of banks now offering up to 65% LTC for development finance.
“Meanwhile, non-bank lenders are offering 70% LTC or higher with margins as low a SONIA +350bps in order to remain competitive. Greater competition has also led to more borrower-friendly structures, including Pari-Passu drawdown profiles becoming standard and a fast route to interest rate margin step downs upon practical completion and stabilisation.”
