London, Manchester, Leeds, Birmingham and Brighton made it into the top 20 European cities for build-to-rent investment, a sector that’s continuing to thrive across the UK.
JLL’s European Multifamily Investment Market Update has revealed the major build-to-rent hotspots in Europe. Build-to-rent, also known as multifamily in Europe, has become a flourishing market across the UK. In 2018, investment volume totalled €6.8bn, which was the second highest in Europe.
On the list of the top European build-to-rent hotspots, London was fourth out of 20 cities. In the capital, activity in the sector amounted to more than €2bn during 2018. Manchester made it in 11th with investment volumes over €715m. Leeds, Birmingham and Brighton followed in 15th, 16th and 17th with €400m, €330m and €325m, respectively.
Philip Wedge-Bernal, one of the authors of the report, said: “Residential investment in the UK has had a breakthrough year, at least in the European context. It is a signal of how far this market has progressed in five short years. This has cemented the UK’s place as a leading European hub for residential investment.”
A rapidly growing sector
Earlier this year, a report by Savills highlighted the amount of investment that is still to come in the rapidly growing build-to-rent sector. The main focus of the market has been in London; however, this is forecast to change as more people continue to leave the capital for a better, cheaper standard of living elsewhere in the UK.
Regional cities, like Manchester, Birmingham and Leeds, are expected to soon surpass London in build-to-rent numbers. Demand for these types of privately-owned rental accommodation is likely to keep growing as renters are expected to outnumber homeowners by 2039. And with young professionals continuing to value city centre living with access to amenities, build-to-rent is an appealing option for many.
Adam Challis, head of living research at JLL, commented: “Combined with big changes in technology, and a deeper focus on wellness and sustainability, JLL expects the most progressive investors to outperform the market by understanding these new customer demands.
“Incumbents will be joined by disruptors that are using digital solutions to recast the customer experience. It is an exciting time for Europeans that want to reimagine the way they want to live in cities.”
With the changing dynamics of the housing market, there are plenty of opportunities for investors to tap into the build-to-rent sector, especially in city centre locations across the Midlands and north of England.