New CBRE research has identified Belfast as being one the UK towns and cities outside London where the demand for rental accommodation will be strongest over the next ten years, and where the burgeoning multifamily or build-to-rent sector could grow substantially.
Read the report: UK Multifamily: Which towns and cities will see the strongest demand in the future?
The percentage of households in privately rented accommodation in the UK has increased from 13% to 20% over the past decade according to ONS data, while the percentage of owner occupiers has declined. More accommodation is needed to meet the demand for homes to rent.
CBRE has tracked over £10bn in investment into the UK’s multifamily, or build-to-rent (BTR), sector over the past five years. The latest figures from BPF indicate that investment into the sector has helped deliver over 40,000 BTR homes, properties designed specifically for renters, which are owned and operated by a professional landlord. A further 110,000 BTR homes are under construction or in planning stages. Multifamily developments typically have an on-site manager and offer other amenities and services for tenants.
Around half of BTR homes are in London, but with regional towns and cities also attracting substantial investment, this balance could change, and a range of locations are set to benefit from the multifamily boom.
Robert Ditty, Senior Director, Capital Markets at CBRE in Belfast, said: “Growing volumes of institutional investment into UK build-to-rent over the last five years is transforming the private rented sector in London and regional cities, but it has yet to make a mark in Belfast. Now is the time to invest here as the fundamentals are positive and there is still an opportunity for first mover advantage. While there are no build-to-rent schemes currently under construction, we anticipate a number getting underway in 2020.
“With a high proportion of young people in Belfast, there is good demand for rental apartments but a limited housing supply. Build-to-rent schemes are particularly popular with young professionals, and Belfast has been recognised as one of Europe’s most business-friendly cities. It has thriving clusters of high growth companies with significant strengths in creative industries, financial and professional services, technology and engineering.”
Following total investment of £2.4bn into UK multifamily in 2019, the outlook for 2020 is favourable. There is £1.5bn worth of deals currently under offer, illustrating the continued high demand for the sector.
CBRE forecasts that total residential investment will increase by approximately 30% in 2020. Demand is being driven by an increasingly diverse investor base from both domestic and overseas institutions. In addition, a subdued sales market is set to persist in 2020, meaning multifamily will be the preferred disposal route for many developers.