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London build-to-rent sector grows by 35% in five years

The size of prime London’s luxury build-to-rent sector has grown by 35% in five years, according to new figures.

More than half (55%) of tenancies in the city for lettings priced above £2,500 per week are now in properties owned by either build-to-rent developers or professional investors. The survey of tenancy data by estate agent Aston Chase shows this to have risen from 20% in 2014.

According to the British Property Federation, prime London’s build-to-rent sector is forecast to grow by 30% per annum over the next five years, while by 2025 the UK’s build-to-rent industry could have a valuation of £75 billion.

Aston Chase states that there are currently just 14,800 completed and tenanted build-to-rent properties across Greater London.

“The Prime London build-to-rent sector is still in its infancy but has huge growth potential,” said Mark Pollack, co-founding director of Aston Chase. “Currently most build-to-rent stock provision has been in outer London and aimed at the starter and middle market, with the luxury sector largely overlooked until recently.

“It is the length of tenancy that build-to-rent investor-developers may be prepared to grant that could give them a strong advantage over privately owned rental property. Affluent ex-pats moving to Central London are typically looking to secure a property for up to three years, which can be too much of a commitment for a private owner of a single residence who might be renting their home during a temporary change in circumstances.”