The latest Savills BTR research revealed that London has witnessed the highest volume of BTR investment in Q1 this year.
Of the £555m of total BTR investment reported across the country, over half of it was deployed in London — according to Savills, this is a result of two significant deals at Alameda and Beton in Wembley Park acquired by KKR, which comprised 490 BTR homes.
Despite this, the UK BTR market saw a relatively muted level of activity, with a total of 10 deals completed amounting to £555m — this marked the slowest Q1 since 2014.
The UK’s BTR stock stands at 101,875 completed homes, up 17% nationally compared to Q1 2023.
There are a further 54,814 homes under construction and 108,917 homes in the planning pipeline, including those in pre-application stage.
The total size of the sector is 265,606 homes, up 4% compared to Q1 2023.
Polly Simpson, head of multifamily development operational capital markets at Savills, commented: “The first quarter of 2024 has been muted, with fewer investment transactions closing; this does however follow an exceptional final quarter of 2023 and therefore does not come as a big surprise.
“Sentiment in the investment market remains strong, with bidding activity increased versus the same period in 2023 which should support increased transaction volumes later in the year.
“Although starts are subdued, it is encouraging to see that there are a still number of homes at the construction and permission stage which have the potential to also support increased starts and contribute to more completions in 2024 and beyond.”
Guy Whittaker, head of UK BTR research at Savills, added: “Amid slowing build cost inflation, the number of completions in Q1 2024 has overtaken the number of starts for the second quarter in a row, widening to 3,404 homes from a gap of 421 homes in Q4 2023.
“This means the number of homes under construction is down 6% compared to Q1 2023, suggesting that investors are prioritising existing schemes over new ones.”
