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Build To Rent Has Held Up During The Crisis, But Investors Remain Cautious

The podium garden area at Canada Garden.

Rent collection in the build-to-rent residential sector has remained higher than the average across all property types during the coronavirus crisis, but investors are still wary about committing too much capital to the sector. 

Knight Frank conducted a survey of institutional investors that own 22,000 BTR units across the UK, and found that 95% of the rent due on these properties was collected between March and June. That compares to an average across UK commercial property of below 80%.

In spite of that rental resilience, 23% of investors said they might put investments on hold in the sector. Q2 saw just £82M of BTR deals completed, CBRE said in a report in July, but added that £1.4B of deals were under offer. 

Knight Frank predicted rents would be flat this year before rising 2% in 2021, with the general economic malaise putting a dampener on growth. 

“Our view remains that long term, the current crisis may well act as a catalyst for an acceleration of institutional capital into the UK’s residential investment sector,” Knight Frank Head of Residential Development James Mannix said.

“Through the lockdown we have seen an increase in the number of new entrants seeking to increase their exposure in the UK market.”