While a record number of new build-to-rent homes gained full planning permission in the first quarter of 2021, the sector has seen robust growth despite the restrictions imposed by Covid-19.
6,937 new build-to-rent (BTR) homes were granted full planning permission in the first three months of the year. This represents the geatest number of planning consents obtained in any quarter in the sector’s history. These data have been taken from research carried out by Savills and commissioned by the British Property Foundation (BPF), while drawing on information from Glenigan‘s planning database and data from market research firm Molior.
Ian Fletcher, Director of Real Estate Policy at the BPF, makes the point that the build-to-rent sector has remained resilient, supporting the economy, new construction, jobs, customers and local communities. All this, even though the UK faced considerable challenges at the beginning of the year and was forced back into lockdown at the end of the year.
The build-to-rent sector continues to grow apace and has become a serious contender in the UK’s delivery of new homes. A total of 188,456 homes in the sector are currently complete, under construction or at the planning phase, a 21pc increase over the last 12 months.
In particular, new housing supply is gaining ground outside London. The UK’s regions are outpacing the capital in terms of current and future supply. As of now, there are 105,277 build-to-rent homes across the regions that are complete, under construction or in planning, a 29pc increase from the first quarter of the year. Whereas the total number of BTR homes in London, at 82,374, is falling behind.
Build-to-rent offers consumers more choice
Jacqui Daly, Director of Savills Residential Research, believes broadly that regional markets have already overtaken London’s market with regard to the number of BTR homes built or in progress. This means the sector is well placed to deliver the Government’s commitment to levelling up that looks likely to be a major feature of the next parliament. She considers these as exciting times for BTR in the UK.
Demand for property in city centres, which is where most BTR homes have been built, is making a comeback, as the easing of lockdown restrictions is making city centre living attractive once again.
Yet BTR developments are not only being built in city centre locations. The number of purpose-built rental properties outside cities has risen recently and there are more than 5,000 completed BTR homes in suburban areas. Although these mostly comprise houses rather than flats, they amount to 10pc of all completed BTR properties.
As suburban BTR gathers speed, offering more choice to renters, the growth in the sector is destined to continue, as people look for larger homes in smaller communities, albeit ones that are well connected in terms of transport, convenience and access to amenities. The changes to the work-life balance that were seen last year are driving renters to seek out properties that offer more space and good links to city centres.
The future looks bright
Mr Fletcher comments that the sector has not only continued to build badly needed high quality rental homes across the UK, but is also diversifying, with plans to build more developments in suburban areas. He welcomes the greater choice offered to consumers who either choose to or are obliged to rent.
The BTR sector has remained notably robust during the pandemic with record investment seen in 2020. Indeed, further growth is predicted for the remainder of 2021 and in the coming years.
Ms Daly regards the data on BTR numbers as a clear indication of some of the factors that will drive expansion in the sector over the coming year, whether they relate to investment, delivery or to consumer choice.