Demand for property
The Residential Investment sector,incorporating purpose-built
Student Accommodation, investment-grade and purpose-built rented accommodation (PRS) and Senior Living has been expanding
rapidly in the Internationally in recent years. The myriad reasons for the growth of investment into income producing residential markets include a
search for diversification, finding value in 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.
Long term investment
For those who are looking to invest, property tends to be a safe option. Although property values rise and fall over time, they tend to increase as the years pass, meaning that rental homes can provide you with a long-term means of making money, and a high-value asset should you want to release the equity in the future.
Demand & Supply
While institutional interest has been slight in the residential investment market, it is likely to increase.
An ever-growing population and difficult access to mortgages will ensure that housing demand in Europe and America will increase in strength, and for the long-term. An ageing population increased immigration and birth rates will bolster our population to a projected 74.3m by 2039.
Future and growth
Back in 2015, the combined values of Student Accommodation, PRS - which includes capital invested as well as committed, and Senior Living rental, was around £46.6 billion. Today, that figure has nearly doubled to £87 billion, according to Knight Frank calculations, with the biggest growth seen in the PRS, where total investment and capital committed has more than doubled in size. Figures suggests that investors are not only increasing the size of their holdings, but also diversifying across the sectors.
The results suggest growth in all three sectors, with a 57% growth in Student Accommodation investment in 2024 compared to today. Investment into the PRS and Senior Living markets is expected to more than double from current levels, with 135% and 137% growth respectively.