Investment in the UK’s build-to-rent sector hit a record £6.31bn in 2022, but economic concerns in the final months of the year slowed the market and have set the tone for 2023.
At the end of the third quarter of 2022, investment was running 60% ahead year-on-year at £4.92bn, according to analysis from JLL. However, activity slumped in the aftermath of the government’s mini-Budget in September. During the fourth quarter investment fell to a quarterly low of £1.39bn.
That left the full-year figure just 4% ahead of the previous record, 2021’s £6.11bn. In 2021, the fourth quarter was the busiest of the year.
Simon Scott, lead director for living capital markets at JLL, said: “The mini-Budget has called time on the rise and rise of BTR investment. Over £6bn in BTR deals made it the fourth consecutive year of record investment. But a typically busy fourth quarter was instead defined by heightened debt costs and investor wariness, and we expect this to continue into 2023. In particular, development will continue to be challenged, pushing investors to existing stock where they can find it and limiting the momentum of growth of the sector.”
The capital was invested across almost 26,000 homes, said JLL, down from 28,606 in 2021.
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