Build-to-rent sector has slated record-breaking start to the year
A record number of new build-to-rent homes gained full planning permission in the first quarter of 2021. The sector has seen strong growth even throughout the COVID-19 pandemic. In the first three months of the year, 6,937 new build-to-rent homes secured full planning permission. This is the highest number of planning consents obtained in any quarter in the sector’s history. This quarterly data is from research produced by Savills, commissioned by the British Property Foundation and draws on Glenigan’s planning database and Molior in London.
Ian Fletcher, director of real estate policy at British Property Federation, comments: “While the UK faced significant challenges at the beginning of this year, having gone back into lockdown at the end of December, the build-to-rent sector has remained resilient – supporting the economy, new construction, jobs, its customers and local communities.” Strong growth in UK's regions The build-to-rent sector is continuing to grow at pace and has become an important part of the UK's delivery of new homes.
Within the sector, a total of 188,456 homes are now complete, under construction or in planning. This is a 21% rise throughout the last 12 months. New housing supply is accelerating outside of London in particular. The UK’s regions are outstripping the capital in current and future supply. Now there are 105,277 build-to-rent homes across the regions that are complete, under construction or in planning. This is a 29% increase from Q1 2020. And London’s total number of build-to-rent homes is falling further behind, standing at 82,374.
Jacqui Daly, director of Savills residential research, adds: “More broadly, regional markets have already overtaken London in terms of the number of build-to-rent homes built or in progress, making the sector well-placed to dovetail the Government’s levelling-up agenda that looks set to be a major focus of the next parliament. These are exciting times for UK build-to-rent.” More choice on offer Demand is returning for properties in city centres, which is where the majority of build-to-rent properties have been developed.
The lifting of lockdown restrictions is making city centre living appealing again. However, build-to-rent developments aren’t only coming to city centre locations. Recently, the number of purpose-built rental properties developed outside of cities is on the rise. Throughout the UK, there are more than 5,000 completed build-to-rent homes in suburban areas. These are mainly comprising of houses instead of apartments and make up 10% of all completed build-to-rent properties. With suburban build-to-rent gaining momentum, this is offering more choice to renters.
This growth will likely continue as many people are looking for larger properties in smaller communities that are still well-connected. Due to the work-life balance changes seen in the past year, renters are looking for properties that provide more space and strong connections to city centres. Ian Fletcher explains: “Not only has the sector continued to build much-needed high quality rental homes across the UK, but it is also diversifying – with plans to deliver more homes in suburban areas than ever before.
It is hugely positive to see the sector offering more choice to customers who either choose or need to rent.” Future outlook The build-to-rent sector has remained remarkably resilient throughout the COVID-19 pandemic with record investment seen throughout 2020. Further growth is on the cards for the rest of 2021 and the coming years. Jacqui Daly says: “These figures are clear demonstration of some of the factors we will see driving UK build-to-rent expansion over the coming year, whether from an investment, delivery or occupier perspective.