The number of Build to Rent homes under construction across the UK has increased strongly with growth in regional areas catching up with London, new research has found.
The analysis, produced by real estate consultants Savills for the British Property Federation (BPF), shows that there are now 139,508 Build to Rent homes complete, under construction and in planning across the UK, an increase of 22%.
The number of homes completed and in planning have also increased by 29% and 10% respectively and for the first time, the total number completed across the UK regions has caught up with the total in London, with 14,615 completed homes in the regions and 14,801 in the capital.
Developments in the regions continue to grow with 24,010 homes under construction in the regions and 19,304 in London while the data also shows that 22,642 homes have been earmarked by local authorities and developers for delivery.
Looking specifically at the use of Permitted Development Rights (PDR) across London, some 30% of completed Build to Rent homes have been delivered through PDR, yet PDR makes up less of the future pipeline in London with only 9% currently under construction and in planning using PDR.
With only 74 Build to Rent developments having used PDR in London, and a total of around 5000 office to residential schemes across the country, the Build to Rent sector’s use of PDR has always remained a small percentage, it points out.
The report explains that as Build to Rent continues to grow, it has also been able to diversify its offer with 15% of schemes in the pipeline including houses, rather than just typical high rise apartments.
In 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, and the BPF believes that the sector has committed to offering this, a promise to ensure more stability and predictability when renting.
‘With the revised National Planning Policy Framework asking local authorities to identify how many new rental homes their respective areas need, the future should remain bright for Build to Rent,’ said Ian Fletcher, director of real estate policy at the BPF.
‘This has never before been enshrined in UK planning policy and will only add to the growing number of local authorities that are seeing the benefits of Build to rent in adding much needed housing supply across the UK,’ he explained.
‘PDR was a policy designed in response to planning policy failure, where too many office buildings sat empty for far too long. Clearly for Build to Rent, PDR has supported kick starting the sector’s growth, but its use has decreased, and this trend is likely to continue,’ he added.
According to Jacqui Daly, director of residential investment research and strategy at Savills, it is no surprise that permitted development accounts for such a large share of completed schemes because it has provided an easy springboard for Build to Rent.
‘Ultimately, however, investors need scale, ideally schemes of 250 plus units, and that’s generally impossible to achieve by converting an existing building. Changes to planning will make it much easier to get bespoke developments off the ground, which will match investor demand for sizeable portfolios offering long term stable income streams,’ she said.
