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Build-to-rent supply increases, suggests research

Words: Laura Edgar
Housing / iStock-807295382

The number of completed build-to-rent homes increased by 23 per cent in 2020 compared with the number completed in 2019, according to research published by the British Property Federation (BPF).

This, the BPF said, signals the sector’s “resilience” during the Covid-19 pandemic.

BPS commissioned Savills to produce the research. It considers Glenigan’s planning database and analysis by market consultant Molior London.

All regions of the UK recorded an increase in future supply: the planning pipeline in Northern Ireland increased the most, with the East of England recording the second highest pipeline, and Scotland in third place.

The research also shows that regions outside London outstrip the capital in current and future supply. The North West has the most build-to-rent homes outside of London – with 32,395.

The North East, North West and South West (-19 per cent) all recorded a decline in the number of build-to-rent homes under construction with -38 per cent, -23 per cent and -19 per cent respectively. However, they saw significant increases in the number of homes in planning: the North East has a planning pipeline of 1,475, the North West has 9,899 in the pipeline, and the South West has 1,862.

The BPF highlights that London saw no uplift in the number of build-to-rent homes under construction and only recorded a 2 per cent rise in the number in planning, meaning the capital’s future growth “will remain subdued”.

Ian Fletcher, director of real estate policy at the BPF, said: “The build-to-rent sector has shown its resilience throughout 2020, with investors continuing to drive the sector’s growth across every region of the UK. The quantum of planning applications in London, however, is static – suggesting that the capital is having to compete more for investment.

“Throughout 2020, around one in five homes completed in London have been build-to-rent – in the regions this share is lower, despite the volume of build-to-rent homes in the regions now surpassing London. There remains a significant opportunity for the sector to increase its share of completions in our regional cities and towns, further supporting local housing supply ambitions, and this will include more suburban houses that families can call home."

Of the completed homes in the UK, 10 per cent are in suburban areas, reflecting the “increasing demand for high-quality rental homes that provide more space and retain good access to city centre locations”, said the BPF. And it is not just apartments being built in city centres – in areas such as Wigan and Wakefield the homes mostly comprise houses.

Jacqui Daly, director, Savills residential research, added: “We saw investment and interest in the build-to-rent market continue in 2020 despite the lockdowns. Suburban build-to-rent has had a particularly strong year, proving very popular with customers. Investors have reported high reservations, with demand driven by customers looking for more space for family and work as a direct result of the experience of lockdown.

“Our analysis has identified a pipeline of 8,500 suburban homes in planning and under construction that will help meet this demand for rental homes in locations that can combine more space, good amenities and connectivity. We expect suburban schemes to play a key role in delivering homes in 2021 and in providing high-quality rental housing in regional markets, helping to address housing need, particularly for young families.”

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