The latest research published by the British Property Federation has revealed that the total number of build-to-rent homes under construction across the UK has increased by nearly 40 per cent.
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.
The findings follow a significant year of new housing policy from the Government, including a revised National Planning Policy Framework that now references build-to-rent specifically, to provide guidance for local authorities when dealing with planning applications from the sector.
According to figures, there are now 139,508 build-to-rent homes complete, under construction and in planning across the UK – an increase of 22 per cent over the last year. The number of homes completed and in planning have also increased by 29 and 10 per cent respectively.
For the first time, the total number of completed build-to-rent homes across the UK regions has caught up with the total in London – with 14,615 completed homes in the regions and 14,801 in the capital.
In 2018, the Prime Minister Theresa May called for the entire private rental sector, including both the buy-to-let and build-to-rent sectors, to provide longer-term ‘family-friendly’ tenancies. The build-to-rent sector has committed to offering this, a promise to ensure more stability and predictability when renting.
Ian Fletcher, Director of Real Estate Policy, British Property Federation comments: “With the revised National Planning Policy Framework asking local authorities to identify how many new rental homes their respective areas need, the future should remain bright for build-to-rent. This has never before been enshrined in UK planning policy and will only add to the growing number of local authorities that are seeing the benefits of build-to-rent in adding much-needed housing supply across the UK.
PDR was a policy designed in response to planning policy failure, where too many office buildings sat empty for far too long. Clearly for build-the-rent, PDR has supported kick-starting the sector’s growth, but its use has decreased, and this trend is likely to continue.”
Jacqui Daly, Director, Savills residential investment research and strategy, adds: “It’s no surprise that permitted development accounts for such a large share of completed schemes because it has provided an easy springboard for build to rent.
Ultimately, however, investors need scale – ideally schemes of 250-plus units – and that’s generally impossible to achieve by converting an existing building. Changes to planning will make it much easier to get bespoke developments off the ground, which will match investor demand for sizeable portfolios offering long-term stable income streams.”