Peer-to-peer property lender Invest and Fund has predicted a rise in the number of build to let properties being funded in 2023.

It comes after Savills revealed that more than £5bn has been invested into the build to let private sector across 2022, citing rental income growth as the main driver.

Invest and Fund noted that built to let refers to the process of units being purpose-built for a future rental market, not the immediate sale into the broader market.

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“Plcs looking to acquire housing assets will often look at acquisition, development, and retention as the three parts of the same overall process, resulting in a yield-baring asset 18 to 24 months down the line,” said Invest and Fund in a blog in the company website.

“So, is there a scenario where market entrants and smaller developers are also looking to build portfolios? We believe that may be the case.”

Invest and Fund predicted that rental yields will continue to rise in the near future as “theoretically, in a recession mortgages become less obtainable or too expensive in the short term for some, forcing up rental demand.”

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Zoopla’s annual market rent report found that rental yields increased by 12.3 per cent in 2022.

“There is no indication that these figures will retrace compared to house prices, with the shortfall of available stock bidding up the rentals month on month,” said Invest and Fund.

“Where there is demand, there is a solution, and should this trend continue to infiltrate the broader market, there will be a home for these clients in our sector.”

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