Build to Rent sector investment to total £24.6bn in the next five years
Build to Rent specialists, Ascend Properties, has highlighted the significant investment growth potential of the sector and how annual investment could soon sit as high as £5.8bn a year based on previous sector performance.
An estimated £4bn was invested in the Build to Rent sector during 2020 alone, a 302% increase on 2015 when the sector saw investment total just £1bn. This latest sum is the largest annual figure to have been invested since then and, as a result, the Build to Rent sector has seen an annual increase in investment averaging 43% since 2015.
In total, just shy of £16bn has been invested into the sector in just five years and the forecast by Ascend expects this to climb considerably by 2025.
Ascend compiled their forecast based on historic Build to Rent sector data and using an Exponential Smoothing Forecasting model (ESF), including interpolation, accounting for seasonality, and based on a 95% confidence interval.
The figures show that should the level of Build to Rent sector investment continue on its current trajectory, the annual rate could sit as high as £5.5bn by 2025.
Ascend also estimates investment into the sector could total £24.6bn between 2021 and 2025, averaging £4.9bn per year.
Managing Director of Ascend Properties, Ged McPartlin, commented:
“Much like the size and prominence of the sector itself, top line investment within the Build to Rent space has snowballed over the last five years.
Many investors have realised the huge growth potential of the sector and while we’ve seen rapid expansion in a few short years, there is still a long way to go in fully realising this potential.
As a result, we expect overall investment within the Build to Rent space to continue to grow and while we can only forecast what this might look like, we expect the level of investment seen by 2025 to rise considerably higher than the current total seen since 2015.”
|Table shows the historic and forecast levels of investment into the Build to Rent sector|
|Year||Build to Rent Investment Value||Year on Year Change|
|Total (2015 to 2020)||15,920,000,000||N/A|
|Total (2021 to 2025)||£24,603,871,430||N/A|