_edited.png){kind=small}
UK Build-to-Rent Macro
Arelsco tackles a fundamental, current and growing need in the UK housing market. Right now, there are simply not enough good quality, low-cost homes available for everyone who needs one.
Demand
Homeownership has been in decline in the United Kingdom, falling from an all-time high of 70.9% in 2003 to 63.9% in 2018. This decline has coincided with a revival of the private rental market. Due to a lack of moderately priced owner-occupied housing, privately owned and social rental housing is particularly common among young and lower-income households, and in urban areas. In the current climate, new starter families are finding it difficult to put up the equity for home ownership, with a trend more akin to Germany emerging in the UK and social attitudes moving toward the rental model.
Social norms are also moving towards aspirational renting, with young professionals not wanting to tie themselves into home ownership too early. This leaves them with more disposable income as well as the ease of moving up on the rental ladder as their income grows.
Supply
Despite rising real incomes, significant population growth driven by net immigration (at least until the Brexit vote), and strongly growing nominal and real house prices, construction of new permanent dwellings has been decreasing dramatically since the late 1960s, leading to a substantial housing shortfall. BTR has become a key part of addressing housing needs in the UK and is taking an increasing share of construction starts. That’s where we come in.
Most of the work done in the UK’s private rented sector has been in big cities with rentals ranging from £2,000 to £3,000 per unit per month. Our product is focused on Tier 2 cities and suburbs of Tier 1 at c. £1,200-1,400 rental per unit per month.