Addressing the Undersupply of Homes to Rent
The drastic shortage of rental properties will lessen during 2023, according to property services company Leaders Romans Group (LRG) which has undertaken a substantial study of the future of suburban BTR.
According to figures published by Zoopla recently, demand for rental homes is at its highest level in over a decade and is exacerbated by a lack of supply: the number of homes available to rent is 38% below the five-year average, while rental enquiries are 46% above average.
“The current state of the lettings market is causing considerable concern, especially as the number of people being made homeless is increasing in run-up to Christmas,” says Andy Jones, Group Director, Corporate Lettings & Build to Rent at LRG. “This has been compounded by many amateur landlords withdrawing from the market due to increasingly stringent regulations. The Government has frequently asserted a desire to ‘shrink the private rented sector and get more people owning their own home’. But the housing crisis cannot be achieved by penalising the already stretched private rented sector (PRS): as the current circumstances show, this only worsens the problem.”
LRG recently published a white paper BTR suburban communities: the next stage in the evolution of Build to Rent, which demonstrates that suburban BTR will provide the solution that the market so desperately needs.
“BTR suburban communities provide desirable rental properties in attractive, well-serviced communities, offering growing families considerable flexibility and a wide range of options for a stress-free lifestyle,” explains Andy Jones. “This new format allows an individual or family to occupy a house which can be made their own – but could be swapped for another as their needs change, with each move being free from the complications of buying and selling. Typically a BTR suburban community offers 24/7 security, all-inclusive bills, extensive facilities and a range of additional services such as cleaning, gardening and even dog-walking. Some are powered by district heating systems, using clean, renewable energy. This is undoubtedly the division of the property sector in which we will see the greatest growth over the next decade.”
Research by the BPF shows the number of BTR units in the UK will rise from 76,800 to over 380,000 in the next ten years, with the majority being outside the major cities. Furthermore, the English Housing Survey 2022 states that the number of households renting privately has increased by 93% in the last 15 years, while the number of owner-occupied households has grown by just 3%: the increased number renting is not solely linked to mortgage rates or the economy, but is part of a longer term trend which also responds to the preference among younger generations for a more flexible approach to homeownership. The same survey show that the numbers of renting households with dependent children has doubled since 2003/4, making up 30% of the sector and the number of ‘comfortable renters’ is expanding too, with this demographic representing 44% of the rental sector.
The BPF analysis showed a 15% increase in the BTR homes either in planning, under construction or completed between Q3 2021 and Q3 2022, from 209,313 to 240,202.