Research published 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.
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.
One year ago, build-to-rent in the regions made up 45% of the UK’s total. 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. However, one of the greatest barriers 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.
Ian Fletcher, Director of Real Estate Policy, British Property Federation, commented: “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.”
The Ministry of Housing, Communities and Local Government recently 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.