Research from the British Property Federation (BPF) and Savills shows that by 2032 8% of UK homes for rent will be purpose-built – up from 1.5% today.

The analysis predicts a continued evolution in the market, with single-family homes making up 18% of BTR stock in ten years’ time compared to 12% today.

The research has been undertaken to coincide with the ten-year anniversary of the Montague Review – a report commissioned in 2012 to remove the barriers to long-term institutional investment into purpose-designed homes for rent.

The review’s recommendations, which were adopted by Government, included more support for BTR in national planning policy and Local Plans, the release of more land for development and standardisation of tenants’ rights.

The Montague Review is widely acknowledged to have marked the birth of the modern BTR sector as The Olympic Village in Stratford, which was designed as temporary accommodation for athletes competing at the 2012 London Olympic Games, became the UK’s pilot BTR scheme once converted into professionally managed rented accommodation.

A decade later, as at Q3 2022, £30bn has been invested into the BTR sector, delivering 76,800 completed homes and a further 163,400 in the planning and delivery pipeline.

While the sector still represents a small proportion of new housing delivery, it is growing rapidly with the number of completed BTR homes increasing by 14% year-on-year in Q3 2022

Ian Fletcher, Director of Policy, British Property Federation, said: “The Montague Review was a significant moment that gave birth to the Build-to-Rent sector as we know it today.

“Ten years on we can say the review achieved its core aim of unlocking long-term institutional investment into homes for rent, helping address the chronic shortage of quality housing in an and around town and city centres and serving as a catalyst for urban regeneration.

“The current market conditions underline that we must continue to diversify housing supply in order to drive economic growth, and the Government must continue to look at how planning reform, more support for local authorities and the release of land for development can enable the sector to continue its upward trajectory.”

Jacqui Daly, Director of Residential Research, Savills, said: “What is clear, is that the demand for high-quality, professionally managed homes for rent is only going to increase, not only for the core demographic of graduates and young professionals but for single families, couples and individuals at all life stages.

“This underpins our projection that we will see huge growth in the sector over the coming decade as institutional investors look at asset classes that can deliver sustainable returns.”