The value of UK living sectors could more than double to £470bn by 2029 if supply shortfalls are addressed, according to a research by BNP Paribas Real Estate (BNPP RE).
Based on calculations of current demand across student housing, build-to-rent (BTR), single-family rental, and senior living sectors, the company estimates the markets to be worth a combined £190bn today, with that figure potentially set to more than double by 2029.
But BNPP RE said that projected growth would only be achieved if supply shortfalls were addressed, which would depend on ‘market force’ factors falling into place, including supportive planning policies, development viability, data transparency, and improved sector liquidity.
Rebecca Shafran, director of alternative markets research at BNPP RE, said: “With the potential for the size of the market to more than double, it’s clear that alongside demographic shifts and urbanisation trends, it places an emphasis on the crucial role these sectors can play in addressing the housing crisis and supporting the living needs of the future.”
Andrew Screen, head of residential capital markets at BNPP RE, added: “We’ve witnessed a significant increase in investors targeting the living sectors over the past six months, and the majority I’m speaking to are all primed and ready to go and are eagerly awaiting the outcome of the budget.
“We also anticipate large portfolio transactions to be traded over the next 12 months, which will be particularly interesting to watch in terms of pricing, yields, and volumes traded.
“In a living sector market with high investor demand and limited development supply, these asset classes provide resilient and strong returns.”