New CBRE research has identified the UK towns and cities outside London – including Bristol – where the demand for rental accommodation will be strongest over the next ten years, and where the burgeoning multifamily or build-to-rent sector could grow substantially.
The percentage of households in privately rented accommodation in the UK has increased from 13% to 20% over the past decade according to ONS data, while the percentage of owner-occupiers has declined. More accommodation is needed to meet the demand for homes to rent.
CBRE has tracked over £10bn in investment into the UK’s multifamily, or build-to-rent (BTR), sector over the past five years. The latest figures from BPF indicate that investment into the sector has helped deliver over 40,000 BTR homes, properties designed specifically for renters, which are owned and operated by a professional landlord. A further 110,000 BTR homes are under construction or in planning stages. Multifamily developments typically have an on-site manager and offer other amenities and services for tenants.
Around half of BTR homes are in London, but with regional towns and cities also attracting substantial investment, this balance could change, and a range of locations are set to benefit from the multifamily boom, including Bristol.
Bristol is one of CBRE’s top future rental cities according to the new study, and a potential hotspot for multifamily/BTR over the next 10 years.
Guy Mansfield, Residential Property Services Director, CBRE Bristol, said: “Bristol is an attractive city, popular with students and young professionals, due to its diverse economy and its hard working but playful culture.
“Whilst Bristol has not seen the same level of growth as other regional cities, we are experiencing unprecedented demand from investors and developers seeking to gain a foothold in the market, with the likes of L&G, M&G, Cubex and Grainger establishing themselves as front runners having secured consented schemes here. Demand for rented accommodation remains stable even in the face of significant rental growth across the city, a sign that further investment in this sector will continue unabated.”
Scott Cabot, Associate Director, Research at CBRE said: “We excluded London from this analysis as we know there is already a substantial private rented sector and strong demand in the city, combined with a strong multifamily development pipeline. Instead, we focused on markets across the wider UK, looking at metrics for current demand, along with forecasts. This enabled us to identify the locations with the highest future demand, which could also attract significant multifamily investment.
“What is clear from our results is that there is a good geographical spread of potential future multifamily hotspots. These include cities with large PRS, like Birmingham and Manchester in England, and Glasgow and Edinburgh in Scotland. We also identified cities with large student populations like Nottingham, Belfast, Bristol and Coventry. People may decide to live in these cities after completing their studies, perhaps working in the growing tech and creative sectors, and will need a home to rent.”