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Build to Rent and US Multifamily

Build-to-Rent (BTR) developments are a relatively new phenomenon revolutionising the UK property market, that have gained momentum and risen in popularity over the last five years. They’re specifically designed for renters, providing high-quality homes with modern amenities in primarily city centres. 

Purpose-built rental accommodation may be new to the UK, but the model has been around in the US for more than a decade. Multifamily rental housing is popular, especially in urban areas of the US, and includes 14.5 million units across the country’s 62 largest metro markets.

Here we look at how both Build-to-Rent and Multifamily housing performed in late 2018 and early 2019.

Rental Growth


For 37 consecutive quarters the US Multifamily market has seen positive rental growth.

As of Q4 2018, the average rent per unit per month stood at $1451. Rent on Class A* units increased by 4.6% from the end of 2017, and 4.4% on Class B/C** units.

Forecasts show that during 2019 overall rental growth is to climb by around 4.2%.


Between 2007 and 2017, the number of households living in the UK private rented sector increased by 63%, from 2.8 million to 4.5 million. The private rented sector comprises 20% of all UK households, which is expected to rise to a quarter over the next few years.

Younger households are more likely to rent privately than older households, with 24-35-year olds representing the largest group (35%). However, private rented sector households are getting older, with the proportion of 45-54-year olds living in the sector, increasing from 11% to 16%.

Over the next five years, rental prices are forecast to rise by an average of 13.7%. 

New Developments 


In the US development activity is at its highest level since the 1980s.

The number of completed units totalled 244,400 in 2018, of which 226,600 were Class A units and 8,200 Class B. Since 2009, 1.4 million Class A units have been built, compared to 36,900 new Class B units.


The total number of BTR homes completed, under construction and at the planning stages stands at 140,000 as of Q1 2019, 13% higher than at the same time in 2018.

At the end of Q1 2019 30,000 homes were completed, up 34% on Q1 2018. Year-on-year the increase in completed homes has been relatively high because the number of completed developments remain a relatively small share of BTR. In London the number of completed BTR homes increased by 27%, and 44% outside the capital. 



Sales volume reached a record high of $172.6 billion in 2018, more than both 2017’s total of $153.9 billion and the 5-year annual average of $150.2 billion.

Foreign investment in Multifamily properties totalled $14.8 billion at the end of 2018, up from $13.1 billion in 2017. 


In Q1 2019, there was a total £1.04 billion investment in the UK private rental sector for Build to Rent schemes, including several forward-funding deals and some direct site acquisitions. That’s four times higher than Q1 2018 and among the strongest quarterly investment volume recorded since 2015.

*Class A: Newly constructed with a full range of luxury amenities.

**Class B/C: Limited amenities, may be in a less desirable area.

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