Investment in the UK's build-to-rent sector has reached £4.2 billion in the first nine months of the year, according to initial findings from Knight Frank's latest market update. The third quarter alone saw £1.6 billion committed to the sector.
Single-family homes were a significant draw for investors, attracting more than £1 billion in the third quarter. This segment represented 67% of the third-quarter investment across 11 deals. Deals involving existing properties also contributed substantially to the total.
Nick Pleydell-Bouverie, head of residential investment at Knight Frank, described the third quarter as a "real turning point for the market." He noted a broader pickup in activity and returning investor confidence, despite headline volumes being boosted by large portfolio deals, such as the Border to Coast Pension Partnership's £400 million acquisition from Blackstone.
Investment in operational properties amounted to £600 million in the third quarter, making up 38% of the money invested. Two large portfolio deals accounted for £500 million of this spending. Across the year so far, operational transactions have constituted 61% of the total investment.
However, Lizzie Breckner, head of build-to-rent research at Knight Frank, indicated that the market remains highly selective due to the current macroeconomic conditions.