Build-to-rent experiences boom
The number of completed homes for build-to-rent have increased by 42% between the first quarter of 2019 and the same period in 2020.
Research published by the British Property Federation shows there are 157,512 build-to-rent homes complete, under construction or in planning across the UK.
As it stands there are 33,505 build-to-rent homes under construction, 11% less than last year, though the number in planning is up 12% to £80,771.
Ian Fletcher, director of real estate policy, British Property Federation, said: “Pain is being felt across all sectors of the economy, but build-to-rent remains attractive to investors and we know from past experience that demand for rental housing usually leads homes-for-sale out of any recovery.
“Our statistics show that a quarter of build-to-rent delivery is now coming from major housebuilders and their support of the sector, through for example access to land, could really boost growth in this sector.”
Outside of London there were 58% more build-to-rent homes completed year-on-year.
However in the capital completions have increased by just 2% year-on-year, while homes in the planning stage are down 10%.
Fletcher added: “One concern is the London pipeline – the statistics show a sharp decline in the number of homes in planning across the capital.
“London was a leader in championing build-to-rent and the sector’s role in adding much-needed new homes to its housing market.
“The imbalance between housing demand and supply has not gone away, and if anything the impact of coronavirus has shown us that a safe and secure home for everyone is fundamental, and we should be doing everything we can to ensure the capital’s housing market delivers for everyone.”
Local developers are currently responsible for building 28% of the market, with UK housebuilders (27%), major UK developers (17%), contractors (14%), registered providers (9%) and major international developers (3%) making up the rest.
Jacqui Daly, director of Savills residential research, said: “We’d expect high levels of uncertainty to increase demand for rented accommodation as people look to avoid longer term commitments such as mortgages, or if borrowing remains more constrained.
“At the same time, we expect to see the leveraged buy-to-let sector to remain under pressure, driving demand into build-to-rent.
“This means that once lockdown is lifted, build-to-rent developers should be confident to progress stalled developments.
“Also, housebuilders will face particular pressure to restore their sales rates when restrictions on doing business are lifted so we could see a greater role for build-to-rent to absorb stock.
“Housebuilders now account for 27% of total build-to-rent pipeline compared to just 10% just three years ago. We could see this share increase significantly over coming months.”