The “Build to Rent” (BTR) sector, though still in its early days, is on the cusp of a major boom, with demographics indicating a rise in older renters seeking quality and stability in their housing choices.

Build to Rent properties, designed specifically for renting rather than sale, are becoming an increasingly prominent part of the UK’s housing landscape. This surge is most notable in London, where the growth rate of BTR homes is outpacing any other segment in the housing market. Currently, BTR properties make up nearly 2.0% of all privately rented homes nationwide and a more significant 4.2% in London.

This trend is not just a blip on the radar; it’s a significant shift in the housing market dynamics. From 2018 to 2023, the number of BTR homes in the UK skyrocketed from 31,409, merely 0.6% of all privately rented properties, to an impressive 100,372, accounting for 1.1% of the private sector. London, in particular, has witnessed a 61% increase in BTR completions, now representing 4.2% of the city’s private rental stock.

What’s Driving the Boom?

According to Sarah Tonkinson, Foxtons’ BTR managing director, the sector’s rapid growth is fueled by changing tenant expectations and demographics. As people increasingly rent well into their later years, they’re looking for more than just a place to live; they seek quality, security, and the assurance that comes with longer tenancy agreements. BTR developments are designed to meet these needs, offering high-quality accommodations and stability that traditional private rentals may not provide.

This shift is significant. It reflects broader changes in society’s approach to housing and personal finance. The allure of homeownership is being challenged by the practicalities of modern living, where flexibility and quality of life often outweigh the traditional British dream of buying a house.

The Future of Housing

The implications of this shift are vast. For renters, the growth of the BTR sector promises better living conditions, more rights, and greater security. For the market, it represents a substantial investment opportunity and a potential shift in focus from selling properties to providing high-quality rental experiences.

However, the journey is just beginning. While the current growth is impressive, the BTR sector still accounts for a relatively small portion of the total housing market. But as demand for quality rental options grows, so too will the BTR sector’s significance.

The changing demographics of renters, coupled with their evolving expectations, are set to revolutionise the UK housing market. The Build to Rent sector is at the heart of this transformation, offering a glimpse into a future where renting is not just a temporary arrangement but a long-term lifestyle choice.