INVESTMENT & FUNDING
Over £40 billion has been invested into UK Build to Rent since its inception, with a record £5 billion invested in 2024. The sources of private sector investment capital have been very varied, as have what they have invested in. UK and overseas pension funds, sovereign wealth, private equity, listed and unlisted companies, UK REITs, European and North American multifamily investors are all active in the UK market, and the sector is increasingly popular with global capital; last year, over half of BtR investment was cross-border. Some investors have taken development risk and been prepared to provide forward funding arrangements. Others have entered into forward purchase agreements and simply purchased stock off a developer when complete. These two routes to market have different tax consequences.
THE ROLE OF GOVERNMENT
As BtR has established itself as a new model for housing delivery – and a new asset class for investors – the role of the public sector in supporting it has been critical. Especially important was the government’s shift – seen most clearly perhaps in its 2017 white paper – to recognising the role that different tenures (besides owner occupation and social housing) have to play in delivering the range and number of homes the UK needs.
Homes England is the Government’s housing accelerator. It provides a range of programmes to help those seeking to deliver housing projects, including the development of Build to Rent. Some of its past programmes have been specific to BtR, others aimed more at the wider development community, and offering debt and equity support.
Venn Partners manage a Government guarantee scheme, which seeks to support institutional investment in the BtR sector, through the creation of a government guaranteed bond programme that will be used to finance long term loans to eligible PRS operators.
