Investors are committing more money than ever to private rented sector

Specialist property investment in the UK increased by 40% last year compared to 2016 to reach a record £17.7bn, with investors spending the most in the country’s rapidly rising private rented sector.

The latest research from Knight Frank, The Human Factor; Specialist Property, has revealed strong performance levels in last year’s specialist property sector investment, which accounted for more than a quarter (27%) of the UK commercial property market.

While four of the five specialist property sectors saw higher investment volumes than in 2017, the largest share of the investment went into the country’s private rented sector (PRS), which received £6.3bn worth of backing from investors over the course of the year. Around £0.5bn was invested in automotive, £1.3bn in healthcare, £5.5bn in hotels, and £4.1bn in student property.

Why is the sector so popular among investors?

A number of issues have driven the increase in demand in the PRS for investors. These include the depleting levels of homeownership across the country resulting in more people renting instead, smaller scale buy-to-let investors selling properties leading to a reduction in stock, and general lack of provision of properties combined with population growth pushing up demand.

The report says: “Despite seeing strong growth in recent years, PRS housing remains a tiny proportion of the UK’s overall rental market.

“We see significant scope for investors able to create or back PRS ‘brands’ which prioritise flexibility towards tenant needs and offer superior levels of service and professionalism.”

There are also opportunities to be had in city centre locations for rising number of young professionals, and the report says micro-apartments and co-living concepts will “enhance affordability”.

The benefits of investing in PRS

Income generated from the private rented sector is long-term, secure, and “typically diversified across a high number of tenancies” for many investors.
[crb_image link=”” image=”” align=”left”]
Furthermore, it is still an emerging market in the UK as investment levels and developments continue to increase, and therefore now is the best time to start investing and identifying the top opportunities, while demand continues to outpace stock levels.

Knight Frank predicts that PRS investment is set to grow significantly over the next five years, with total investments hitting as much as £70bn by 2022, with an additional one million households in rented accommodation – and investment from both the UK and abroad will drive these numbers.

“The fastest pace of growth will be seen in the market for single family housing, which caters to the rapid growth in the 35-55 demographic,” adds the report.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT