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24/05/2021

Approval of build-to-rent homes on a high

Words: Laura Edgar
First home / iStock-546201806

In the first three months of 2021, 6,937 new build-to-rent homes were granted full planning permission in the UK during the first three months of 2021, according to research published today (24 May).

The British Property Federation (BPF) said this is the highest number of permission granted for any quarter in the build-to-rent sector's history.

The third quarter of 2016 recorded 6,321 permissions and now sits in second place.

There are now 188,456 build-to-rent homes either complete, under construction or in planning across the UK. The research shows that this number is 21 per cent more than the number recorded 12 months ago.

Regions outside London have 105,722 build-to-rent homes either complete (29,673), under construction (19,827) or in planning (56,222). London has 82,734 build-to-rent homes either completed (28,365), complete (16,227) or in planning (38,142).

According to the study, there are now more than 5,000 completed build-to-rent homes in suburban areas, 10 per cent of all completed homes, which reflects “increasing demand for high-quality rental homes” in the UK. In areas like Crawley, Wigan and Wakefield, these developments mostly comprise houses, while in the city centre, they tend to be flats.

The research finds that suburban build-to-rent has gained momentum over the past few years; there are currently 3,449 homes under construction and 5,296 in planning.

Ian Fletcher, director of real estate policy at the BPF, noted that despite the lockdown to stem the spread of Covid-19 at the start of 2021, the build-to-rent sector “has remained resilient – supporting the economy, new construction, jobs, its customers and local communities”.

“Not only has the sector continued to build much-needed high-quality rental homes across the UK, but it is also diversifying – with plans to deliver more homes in suburban areas than ever before. It is hugely positive to see the sector offering more choice to customers who either choose or need to rent.

“As this quarter’s statistics show, planning permissions were at record levels despite current conditions. Local authorities have been able to hold planning meetings online, which has in large part supported this success."

Highlighting that the legislation to enable virtual meetings ended on 6 May, Fletcher concluded: “I hope the government considers the valuable lessons learned from having to operate the planning process remotely, and will seek to legislate to allow some of the positive outcomes from remote participation to continue in the future.”

The BPF commissions the quarterly research to Savills. It draws on Glenigan’s planning database and Molior in London.

Jacqui Daly, director of Savills residential research, said the figures demonstrated  some of the factors that will drive the UK build-to-rent expansion over the coming year, whether from an investment, delivery or occupier perspective.

“The suburban build-to-rent model is one we expect to see grow strongly over coming years. A desire for more space, and for life in smaller communities, with local services close by, is likely to be a lasting legacy of Covid-19. That’s particularly true for families, pointing to rising demand for family homes in well-connected suburbs that offer longer tenancies.

“At the same time, we are now seeing clear evidence of demand returning to major cities as people plan for a return to a more regular presence in the office, and this will underpin growth of the sector in these key employment centres traditionally undersupplied of private-rented stock.”

Image credit | iStock

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