Commercial Real EstateEditors ChoiceResidential Real EstateUK Property Investment

UK’s build-to-rent sector continues to rapidly expand

A recently published analysis by The British Property Federation (BPF) shows the Build-to-Rent (BTR) sector continues its rapid expansion. The data reveals that the number of completed homes has increased by a fifth over the past year.

The analysis, conducted at the end of the first quarter, revealed that 72,668 BTR homes have now been constructed in the UK. The figure is up from the 60,965 registered a year ago, with completions in the past year evenly spread across London (5,802 homes) and regional cities (5,901).

According to the report, a total of 46,304 build-to-rent homes were under construction at the end of the first quarter, which is up 14% year on year. Further analysis reveals that the number of units in the planning pipeline is 11% higher than twelve months ago.

Completed schemes are delivering an average of 140 units, while those under construction are averaging 243 homes. Projects in the planning stage are averaging a total of 308 units.

 “Our analysis for the first quarter of the year underlines just how rapidly the UK build-to-rent sector is expanding. Completed homes increasing by a fifth in a single year is a significant leap and suggests the sector is making a strong contribution to UK housing delivery,” said Ian Fletcher, director of real estate policy, British Property Federation, adding:

“Long-term demand for rental homes means the sector’s prospects remain very positive. One thing to watch in coming quarters will be turbulence caused by build cost inflation, however, the sector’s planning pipeline continues to grow, and we are seeing a shift towards larger-scale development as investors recognise the acute shortage of high-quality homes in many cities and the need to intensify land use in and around densely populated areas.”

The rising BtR completions fall in line with Savills estimates that there will be 30,000 annual completions by 2026, 13.5% of annual supply. What has shifted recently however is distribution. Since the first Covid-19 lockdown, investors have realised the opportunity to become early investors in new markets- a trend that is likely to remain for the foreseeable future.

Leave a Reply