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16/04/2018

Build-to-rent units on the increase, suggests research

Words: Laura Edgar
Flat interior / Shutterstock: 526355959

The number of build-to-rent homes that are either complete, under construction or in planning in the UK has increased by 30 per cent over the past year, according to the British Property Federation (BPF).

The BPF commissioned Savills to conduct and publish the research on a quarterly basis, and this set of data is the first this year.

It suggests that there are 117,893 build-to-rent homes in the UK, up from 90,761 compared with the first quarter of 2017. This figure comprises homes across all stages of the development cycle.

When broken down, the number of completed build-to-rent homes stands at 20,863, up 45 per cent from the 14,371 built in the same period last year.

In Q1 of 2018, there were 33,075 build-to-rent homes under construction, an increase of 47 per cent from the 22,498 under construction in the same period in 2017.

In terms of the total number in planning, the research considers the capacity of strategic sites identified for build to rent that have yet to be submitted for planning permission. Local authorities and developers have put forward 17,578 for delivery on these sites. In total, there are 63,955 build-to-rent homes in planning for the first quarter of 2018, compared with 53,892 in the first quarter of 2017.

According to the research, 12,062 build-to-rent homes were completed, 12,611 were under construction and 35, 857 were in planning across London, in Q1 of 2018. This totals 60,530. In the regions, 8,801 were completed, 20,464 were under construction and 28,098 were in planning, totalling 57,363.

In the regions, the North West has the highest volume of build-to-rent homes that are either complete, under construction or in planning.

Ian Fletcher, director of real estate policy at the BPF, said the build-to-rent sector is “evolving quickly, with significant delivery in the regions and more houses, rather than just apartments, coming forward”.

So far, the sector has grown without a “planning blueprint”, but Fletcher noted that the policy for sector is adapting.

“With the draft revised National Planning Policy Framework (NPPF), local authorities will now have to specifically identify how many new rental homes their respective areas need. This has never before been enshrined in UK planning policy.

“Clearly, there are exemplar local authorities across the UK leading the charge, giving build to rent a chance to expand in the regions and demonstrate that it can cater for a wider range of people. The sector, however, has significant potential to deliver more professionally managed homes for all renters seeking higher-quality service and facilities.”

Jacqui Daly, director, residential investment research and strategy at Savills, added that there is “real momentum” in the sector.

“At this rate of growth, we expect that the build-to-rent pipeline could double to around 200,000 within the next two years.”

Housing minister Dominic Raab said the increased in completed build-to-rent homes is “good news”, but that the government is “restless to do more”.

He said the draft NPPF is a “crucial next step in supporting the build-to-rent sector, reforming planning rules, and helping to deliver 300,000 homes a year by the mid-2020s”.

Image credit | Shutterstock

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