Is UK build-to-rent at an allocation tipping point?

The past decade has been a period of steady growth for the UK build-to-rent (BTR) sector, moving from interesting new concept to an established asset class as the demand for such homes has been proven in markets across the country.

Led by specialist funds and propcos — with balance sheets suited to the sector’s risk profile and, often, expertise from more mature markets in the USA and Europe — BTR investment has largely focused on high-quality schemes in prosperous city centres, targeting higher-end customers. Slowly but surely, these assets are proving BTR’s ability to produce the stable target returns that such investors seek. BTR also offers a perceived inflation hedge — a particularly attractive feature for many in the current economic environment.

With the asset class becoming established, pressure is growing from balanced funds and other multi-asset-class investors to increase their exposure to residential and, in particular, BTR. It is a shift that is