A subdued start to 2024 for BTR investment

UK Build to Rent (BTR) investment volumes in Q1 2024 totaled £433.3m, down from £1.2bn in Q1 2023, according to new preliminary data from global real estate advisor, CBRE.

Investment into the sector slowed from the end of 2023, with investment in Q1 2024 down 63% from the circa £1.2bn invested in the same period of last year.

Major deals from Q1 included KKR purchasing two stabilised buildings from Quintain at Wembley Park. L&G acquired the ‘North Tower’ at Deansgate Square in Manchester, as well as forward funding a single-family BTR investment in Hastings.

Andrew Saunderson, Head of Residential Capital Markets at CBRE, said: “Investment into the sector in Q1 2024 has been more subdued, particularly relative to the end of 2023 which was bolstered by Blackstone’s partnership deal with Vistry. That being said, the pipeline of investment is robust with an estimated £1.6bn currently under offer.

“Yields were stable this quarter for the first time since 2022, indicating that prices in the sector have stabilised. Looking forward, with the headline rate of inflation now standing at 3.4%, the chances of a pre-summer interest rate cut have increased, which would be well received by the market.

“Government intervention, however, could hinder activity, namely, the abolition of multiple-dwellings relief as part of the Spring Budget, which will impact values, particularly in regional markets.

“Similarly, the continued uncertainty over the new rent control proposals for Scotland is also unhelpful for investors into the sector.”