The rise of ‘built-to-rent’ homes as a major competitor for tenants with private landlords took a leap forward this week after two US firms revealed they had bought 1,750 homes off a UK builder that will now be rented out rather than sold.

Blackstone and Regis have paid £580 million for the homes, which are under construction at 36 sites across southern England by builder Vistry. All the properties are expected to be completed by 2026 including at Peters Village in Wouldham, Kent (main image).

Just six months ago the two firms bought 2,800 homes off Vistry in a similar deal

Once all are completed, the homes are to be managed on behalf of the two US companies by Leaf Living.

The deal is a consequence of the weak property sales market, which Vistry had counted on for profits this year but, now that the home sales market is proving tricky, the company has instead sold them to a private rented sector operator.

Vistry will continue to build homes, but focus on the ‘affordable homes’ market in partnership with local councils and other providers.

Important role

“Institutional private capital can play an important role in providing high quality housing stock across the UK, particularly in the private rented sector which is significantly under supplied today,” says James Seppala, head of European real estate at Blackstone (pictured).

“Partnerships such as these can meaningfully accelerate the delivery of new homes and help alleviate structural undersupply across the sector.”

The build-to-rent sector is growing fast in the UK. The total number completed now stands at just over 100,000, a 17% increase on a year ago. Add to this the number that are in planning or under construction and the figure rises to just over a quarter of a million.

Vistry is the parent company of three of the UK's biggest home builders - Countryside, Bovis and Linden Homes.