The British Property Federation (BPF) has published its first set of annual data on the build-to-rent sector’s growth, which shows the total number of build-to-rent homes complete, under construction and in planning across the UK has increased by 30% in the past year.
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.
In the UK, there are now 117,893 build-to-rent homes – new, high-quality and professionally-managed homes built for renters – across all stages of the development lifecycle, compared to the total of 90,761 homes at the end of Q1 2017.
When looking specifically at the number of completed build-to-rent homes, the total has increased by 45%, growing from 14,371 to 20,863, in the same period.
This figure is even higher for the number of build-to-rent homes under construction, which has increased by 47%.
For the first time, included in the total figures for ‘in planning’, the research has tracked the capacity of strategic sites across the country identified for build-to-rent. A total of 17,578 homes have been earmarked by local authorities and developers for delivery on these sites.
The number of homes provided by the Build-to-Rent sector continues to grow in both London and the regions.
The regions, however, now have a significant lead over London in greenlighting developments, with 62% of all build-to-rent homes under construction.
Outside London, the North West leads with the highest volume of build-to-rent homes complete, under construction and in planning.
The build-to-rent sector can revolutionise the rental market in the UK. It is funded and managed by investors who require long-term rental growth for pensioners’ savings, which means its business model is fundamentally dependent on ensuring its customers’ experience of renting is an enjoyable one, and the sector becomes one in which customers are happy to stay if they wish.
On 5 March 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 already committed to offering this, a promise to ensure more stability and predictability when renting.
As build-to-rent continues to grow, it has also been able to diversify its offer – with 17% of schemes in the pipeline including houses, rather than just typical high-rise apartments.
Ian Fletcher, Director of Real Estate Policy, British Property Federation said, “The build-to-rent sector is evolving quickly, with significant delivery in the regions and more houses, rather than just apartments, coming forward. Policy is also adapting, as to date the sector has grown without a planning blueprint. This is now changing. With the draft revised National Planning Policy Framework, 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, Savills residential investment research and strategy, added, “The development pipeline is growing strongly at both ends. The number of homes completed and under construction has risen by 46% in the past year alone, and the pre-planning pipeline is growing quickly.
“There is now real momentum in the sector, having received a significant boost in the draft revised National Planning Policy Framework, which officially recognised the importance of build to rent in bringing forward new homes and the need to define sites to ensure delivery. At this rate of growth, we expect that the build to rent pipeline could double to around 200,000 within the next two years.”
Minister of State for Housing Dominic Raab added, “The 45% increase in completed build-to-rent homes is good news, but we’re restless to do more. Our revised National Planning Policy Framework 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.
“This government is backing reform with £4.1bn to fund the roads, schools and medical centres needed to reinforce our local communities, as we build the homes Britain sorely needs.”