Investment in BtR experienced a bumper year in 2024 and is expected to exceed that in 2025. Agents LSH predict BtR to attract £6 billion worth of investment this year. Institutional funds – both domestic and international - are driving growth and a highly professionalised form of management. BtR now accounts for 14% of housing stock. Central urban, multi-occupancy, developments have been at the forefront of boom, with young professionals as the main group of tenants. As the BtR market matures generally, the most rapid growth is in a newer element of BtR which is now emerging; homes for rent by single families (SFR). The North East is joining other regions in which SFR is experiencing substantial growth.
Newcastle-based George Parker-Fuller, Head of Housebuilding, at international law firm DAC Beachcroft looks at some of the emerging schemes.
Newcastle is becoming an increasingly attractive location for investment, as a city offering a desirable lifestyle. 15 minute neighbourhoods, where key amenities can all be reached within a 15 minute walk, bike ride or public transport are attractive propositions, but they are a rare prize. Newcastle is one such place, helping strengthen its appeal to a wide range of interests, including BtR developers.
The North East’s BTR sector continues to mature. Three major schemes in Newcastle - The Forge, Regent Centre and Hadrian’s Tower at L&G's Helix development – have been in the vanguard of the trend. Olympian Homes has secured funding for its Pottery Lane project, which is set to become Newcastle city’s largest multi-family development. Houston-based investors, Hines, are providing funding for their first deal in the UK BtR market. Development has commenced on site and, at the time of writing, the superstructure of the blocks has been completed.
The 325,000 sq ft development will create 519 units delivered in two phases. The first 11-storey block, comprising 292 private units is scheduled for completion at the end of 2026, with an additional six-storey, 227-home asset due for delivery in 2027. The project is located within Newcastle’s Forth Yards Regeneration Area, a priority zone for new investment at the core of city’s repositioning as a regional hub for the tech, life science and innovation industries.
Gainford has recently announced its plans to include a 29 storey residential development at the former Premier Inn site in Newbridge Street. Plans have been submitted by iMpeC and Buccleuch Property for 230 BtR homes in Middlesbrough's Gresham regeneration area.
The former bus depot in Jesmond has been in the press as a BtR led regeneration project which will provide new apartments situated on upper floors, with these operated by a professionally managed landlord with commercial and community spaces on the lower levels. The regeneration project is led by Vistry Group and forms part of an initiative to revitalise the Shieldfield/South Jesmond area, providing enhanced pedestrian connections between Ouseburn to Jesmond as well as new areas of public open space and commercial opportunities
There is also a growing proliferation of developments which are looking to create homes for rent by single families. The relative affluence of the ‘young professional’ demographic that BtR schemes target has made it very popular with investors and the ‘SFR’ sector is now also demonstrating its potential.
The sector is predicted by some to have the highest growth trajectory of all real estate classes and is now considered an established asset class for UK property investors. Whilst still very much in its infancy – the sector only currently accounts for 3% of BtR schemes – the scope for SFR is widespread.
By providing high-quality rental homes at sensible prices, neighbourhoods can be transformed by SFR projects which attract and retain the skills and talent which are crucial to an area’s long-term economic viability.
Developer Placefirst is becoming a prominent SFR provider in the North East. It is Sunderland's development partner at the city's Riverside regeneration project and also has projects in Hetton-le-Hole, Durham and Hartlepool. Last year, it secured planning consent for its 146-home Benwell Dene project, two miles west of Newcastle city centre.
The project will redevelop a 6.8-acre brownfield site, which has been vacant for more than a decade, into homes with two to four bedrooms which are built specifically for long-term private rent. It’s perhaps a cliché that families want to ‘put down roots’, but in the context of the SFR market this is a major positive for investors as it promises long-term, sustainable income. And for the families who occupy them, SFR developments offer quality homes without the uncertainties of the fragmented private rented sector.
BtR isn't just about new build. Schemes can also utilise refurbishments of existing buildings, such as the redevelopment of the 18 storey Cale Cross House in Newcastle by Beech Holdings for co-living style accommodation. This can be a powerful force for regeneration in areas very attractive to those wanting a city centre life-style, but the financial model doesn't stack up for developers focused on creating build-to-sell homes.
With a growing number of existing SFR neighbourhoods plus several more in the pipeline, the North East is clearly starting to reap the benefits of the sector
