Around £3.5bn of the investment was placed in the Build-to-Rent sector
UK residential investment volumes matched the all-time high 2018, reaching £6.1bn last year, according to new figures released by Colliers.
The data reveals that London’s housing market attracted by far the greatest level of investment in 2020 at £2.8bn.
Around £3.5bn of the investment was placed in the Build-to-Rent sector. By the end of the year the total BTR pipeline stood at 126,085 units, a 17% increase on a year earlier.
Andrew White, head of residential at Colliers, said: UK residential property is a solid investment option in the UK, particularly in the burgeoning Build-to-Rent sector as there is a perfect storm of a shortage of housing, and a huge affordability gap, especially for those who want to work and live in London. Over the last year the sector has grown 20 per cent and is going to continue to grow to meet the country’s housing needs.
In addition to Build-to-Rent our cities, and in particular London, will always be attractive to overseas investors. Despite Brexit the UK is still a gateway location to Europe and America, providing access to a secure financial market and another currency to capitalise on, he said.
Along with investment properties, consumer residential sales also performed well last year.
Although the first UK lockdown prevented property viewings from taking place, the chancellor’s announcement of a stamp duty holiday last spring helped to capitalise on the pent-up demand which appeared once restrictions were lifted.
In the fourth quarter of 2020, transaction figures reached 351,000, the second highest quarterly figure since the global financial crisis, behind the first quarter of 2016 when it reached 387,000 ahead of second home stamp duty changes introduced in April that year.
Also during the fourth quarter of 2020, there were 307,000 mortgage approvals, with an average mortgage size of £211,119.
Oliver Kolodseike, deputy chief economist at Colliers, commented: It’s no surprise that the stamp duty holiday has resulted in a rush in home buying as the upfront costs become more obtainable. With affordability ratios continuing to deteriorate as house price growth outperforms earnings growth, house buying is as difficult as ever, particularly in the south east, and any support brought in by the government is welcomed.
