UK residential investment: rental demand strong as investment rises

The demand for investment opportunities in rental homes in the UK continues to be a feature of the real estate market in 2022.
Written By:
Oliver Knight, Knight Frank
1 minute to read

Investors continue their search for defensive counter-cyclical investments underpinned by solid fundaments, further pushing what were once considered ‘alternative’ asset types into the mainstream.

Those fundamentals were on full display in the latest release from student admissions service UCAS which showed record application rates for 18-year-olds in England, Wales and Northern Ireland, as well as an increase in Chinese and Indian students applying to study in the UK. The student market continues to show signs of a strong recovery on the back of a return to in-person lectures, with sector-wide occupancy rates returning toward pre-covid levels.

Provisional data for Q1 points to a strong start to the year for investment. Across all residential asset classes, inflation remains a concern, along with higher build costs for those funding development. Both have the potential to put further pressure on scheme viability, rents and asset pricing. However, the fundamentals that have driven investor interest are unchanged – whether that’s a growing and undersupplied rental market, an aging population, or increasing student numbers.

Read more or get in contact: Oliver Knight, head of residential development research

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