UK regions overtake London in total number of build-to-rent homes

Research published today by the British Property Federation (BPF) shows that there are now 124,037 build-to-rent homes complete, under construction and in planning across the UK.

  • Build-to-rent sector now boasts 124,037 homes complete, under construction and in planning across the UK
  • As MHCLG launches longer-term tenancy consultation – build-to-rent sector reiterates its three-year pledge made last year, to offer customers longer-term tenancies

To aid transparency on the sector and its growth, the research has been produced by Savills, commissioned by the BPF, and is published quarterly as an interactive map on the BPF’s website.

While the construction of build-to-rent homes in the regions has outpaced construction in London over the past year – the total number of build-to-rent homes in the regions, complete, under construction and in planning collectively, has now surpassed the total number in London.

Table 1: Total number of build-to-rent homes recorded at the end of Q2 2018

UK regions overtake London in total number of build-to-rent homes

SOURCE: BPF with analysis from Savills

One year ago, build-to-rent in the regions made up 45 per cent of the UK’s total.

Table 2: Total number of build-to-rent homes recorded at the end of Q2 2017

UK regions overtake London in total number of build-to-rent homes

SOURCE: BPF with analysis from Savills

Build-to-rent’s investors and developers wish to build at scale. Given that the sector depends on stable, long-term rental income, its rate of delivery is not restricted by the rate of sale – a challenge faced by the traditional volume housebuilders. One of the greatest barriers, however, to build-to-rent investment and delivery is finding sites that will allow it to increase the size of its developments.

This research shows that investors and developers are making progress in finding scale. While only two completed developments have over 500 build-to-rent homes each, there are now 25 developments in planning and 12 under construction with over 500 build-to-rent homes each.

Table 3: Number of schemes by unit band size  

UK regions overtake London in total number of build-to-rent homes

SOURCE: BPF with analysis from Savills

At the start of this week, the Ministry of Housing, Communities and Local Government launched its longer-term tenancy consultation to understand any obstacles that would prevent a landlord from offering a three-year minimum lease term to a tenant.

In April 2017, the BPF gave the Government its three-year pledge on behalf of the Build-to-Rent sector, to demonstrate the sector’s commitment to providing additional security to those customers who require it.

Ian Fletcher, Director of Real Estate Policy, British Property Federation comments:

“This is a significant landmark moment for build-to-rent, with the sector’s total number of homes across the UK’s regions overtaking London’s total for the first time ever. Clearly, recognition of build-to-rent’s potential to deliver much-needed new, high-quality rental homes is gathering momentum across the country.

“Sir Oliver Letwin’s Review published last month was right to identify that the homes-for-sale model is undoubtedly restricted by the rate of sale. This is unlikely to change any time soon. Build-to-rent breaks this link. Investors in build-to-rent are keen to develop quicker and at higher density, and the sector has much to offer to accelerate housing delivery on large, urban strategic sites.”

Jacqui Daly, Director, Savills residential investment research and strategy, adds:

“There is growing evidence that large sites need a range of tenures to speed up build out rates and that build-to-rent should be part of the mix. By bringing in a forward funder, build-to-rent can also help de-risk large schemes, creating an early sense of place as tenants move in, and footfall for on-site amenities.”

 

Kindly shared by British Property Federation (BPF)