Investment into purpose-built rental homes, student accommodation and senior living in the UK will hit £146bn by 2025, according to Knight Frank’s latest research.
This is an increase from £87.3bn in 2019, and will be driven by investors diversifying their assets and emerging sub-sectors maturing.
Knight Frank’s Residential Investment report digs into the combined living sub-sectors for the first time.
The BTR market will overtake student accommodation, with £75bn to be invested in the next five years, it says.
Student accommodation is projected to see £65bn of investment, with £5.9bn forecast for the senior living sector.
In contrast, 2019 is expected to see £51bn go to student accommodation, £35bn to BTR and £1.3bn to senior living.
Knight Frank sector heads noted the USA, Canada and the UK as sources of investment in these areas.
Knight Frank surveyed 43 investors with a combined £32bn investment in the sectors.
Some 35% of respondents said they expect to be active across all three sectors in 2024, up from 13% today. Additionally, 70% of respondents said they would be active in two sectors, up from 40% today.
Respondents identified London and Bristol as areas of strong investment opportunity, and highlighted Birmingham as a hotspot for BTR investment in particular.
James Mannix, joint head of residential development and investment at Knight Frank, said: “The growth of these sectors is mainly down to investor appetite for diversification, the granularity of occupiers that comes with individual units, demographic and tenure shifts and a housing policy landscape in the UK that is now embracing diversity of tenure.
“While there are significant differences in market drivers for each sector, there are key synergies in construction and operations, making a move across sectors even more appealing for investors”.
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