BTR Output Sees Unexpected Growth Despite Pandemic

BTR Output
According to the latest data from the British Property Federation, the number of new, high-quality and professionally managed homes built for rent and completed in 2020 rose by 23pc.

An analysis of the government EPC data on total quarterly housing completions in England and Wales shows build-to-rent (BTR) delivered 4pc of all new homes and almost 20pc of all new homes in the capital by the end of the final quarter of 2020.

The sector continues to increase new housing supply beyond London, stealing a march on the capital in both current and future supply. While the planning pipeline in Northern Ireland increased most noticeably, every region of the UK recorded growth in future supply. The East of England ranked second and Scotland third.

The North West still enjoys the greatest number of BTR homes outside London, with 32,395 homes; complete, under construction or in planning.

Falls in the number of BTR homes under construction in the North East (-38pc), North West (-23pc) and South West (-19pc) are compensated for by substantial increases in the number of homes in planning, promising a vigorous future pipeline for the sector in these regions.

By the same token, a fall in the number of homes in planning in the South East (-24pc) is outweighed by an increase of 118pc in the number under construction, proof if it were needed that developments are successfully navigating their way through the planning system.

The capital’s future growth looks to remain downbeat with a mere 2pc increase in the number in planning and no rise in the number of BTR homes under construction in the city.

More houses than flats in suburbs

There are now something like 5,000 completed BTR homes in suburban locations across the UK, comprising 10pc of all completed BTR homes. This indicates the escalating demand for high-quality rental homes that offer more living space while providing good access to city centres.

This model, as currently exists in towns such as Wakefield, Crawley and Wigan, features houses mainly, as opposed to the BTR apartments to be found in city centres.

With 5,400 applications in planning and a further 3,200 under construction, suburban BTR has gained traction over the last few years and looks set to continue the momentum throughout 2021.

8,500 BTR homes planned for suburbs

Ian Fletcher, Director of Real Estate Policy at the British Property Federation (BPF), believes the BTR sector has proved its resilience in 2020, with investors driving the growth of this type of housing in every region of the UK. However, the fact that planning applications in London have stalled suggests that the capital is having to compete more for investment.

In 2020, he said, around 20pc of homes completed in London were BTR, but this proportion is lower in the regions, despite the volume of such homes in the regions now outstripping London. There exists, therefore, a sizeable opportunity to increase the share of completions in this sector in regional towns and cities.

Further development, he added, will support ambitions to increase local housing supply, including more suburban houses that families can call home.

Mr Fletcher added that the pandemic has emphasised the need for high-quality housing as we now spend more time than ever in our homes. At the same time, there has to be a solution to the longstanding imbalance of demand and supply in the housing market.

Jacqui Daly, Director of Residential Research at Savills, comments that their analysis has identified a pipeline of 8,500 suburban homes both in planning and under construction that will help meet the demand for rental homes in locations combining additional space with good connectivity and amenities.

Ms Daly expects suburban schemes to continue playing a key role in delivering homes this year and providing high-quality rental housing in regional markets, which will help to address the need for housing, especially for young families.

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