The value of operational living real estate sectors in the UK are set to grow by £283B over the next five years, but only if current supply shortfalls can be addressed.

The combined value of the current build-to-rent, student accommodation, single-family rental and senior living sectors stands at £190B today. That could be worth as much as £473B by 2029 if current demand patterns continue, BNP Paribas Real Estate predicted in a research note.

Single-family rental is on course to see the biggest growth in percentage terms, increasing more than eightfold from £7B today to £59B in 2029, BNP said.

But senior living could see the biggest growth in absolute terms, with the value of the sector set to almost quadruple from £63B today to £219B. That would make it by far the biggest of the UK living sectors.

The two largest sectors today are still on pace to grow strongly, BNP said. Student accommodation could grow from £58B to £98B and build-to-rent from £62B to £97B.

The projected figures will only be achievable if supply shortfalls are addressed, BNP said. And that will be dependent on a number of market factors falling into place, including supportive planning policies, development viability, data transparency and improved sector liquidity.

“With the potential for the size of the market to more than double, it’s clear that alongside demographic shifts and urbanisation trends, it places an emphasis on the crucial role these sectors can play in addressing the housing crisis and supporting the living needs of the future,” BNP Paribas Real Estate Director of Alternative Markets Research Rebecca Shafran said in a statement.

“A few question marks have been placed over the future of the likes of single family rental, senior living rental models, and student living as asset classes, however, this data shows that there’s reasons to be bullish with investment allocations.”

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