The Build to Rent – Operational Market
Overview
Data shows that Buy-to-Let (BtL) landlords are exiting the market, with up to a quarter of tenants at Allsop SFH sites coming from rental properties that are being sold. The tightening supply of rental properties, coupled with the security provided by institutional landlords, is fuelling demand for SFH homes. As a result, SFH schemes are stabilizing at 98% occupancy—well beyond what was previously seen as the “glass ceiling” for rental properties in these areas.
Who is Active / Headline Deals
Market sentiment is clearly strong, with Kennedy Wilson most recently completing their schemes in Norwich and Stevenage. Looking ahead, Allsop anticipates launching an additional 12 SFH communities over the next 12 months in partnership with Packaged Living, Kennedy Wilson, SavillsIM, and Urban and Civic. The confidence investors have in the sector is unmistakable.
In terms of multi-family projects, Allsop launched two sites in Leeds during the prior quarter—Phoenix and Radiant. We also took handover of our second operational asset in Liverpool, Milliners Yard, on behalf of Columbia Threadneedle.
Additionally, Allsop has recently secured new management instructions from Round Hill Capital for their 488-unit scheme in Manchester and from CDL for their 375-unit, 51-storey tower. These larger developments represent a subtle shift in market dynamics, with investors increasingly valuing the economies of scale that large buildings can bring to the Build to Rent (GtN) sector.
Direction of Travel
What was once seen as a temporary measure in response to market conditions is now being recognized as a viable, long-term profit centre for single-family housing. Many national housebuilders are increasingly viewing SFH as a strategic avenue, with institutional investment complementing open market sales and, in some cases, broader affordable housing options. For institutional investors, SFH has become a swift and efficient means of deploying capital and building a portfolio.
In the BtR sector, we are starting to see a growing number of first- and second-generation assets enter the market. Allsop will continue to monitor the performance of these schemes, particularly with a focus on how early-generation assets with single-stair core designs perform in terms of both tenant demand and operational efficiency.