The number of completed build-to-rent homes increased by 23% in 2020, according to the British Property Federation.
While there’s been strong growth in BTR development across the UK, London appears to have stalled
The BPF, research produced by Savills, found build-to-rent delivered 4% of all new homes in England and Wales, and around a fifth of new homes in London, in the final quarter of 2020.
The report found the sector continues to accelerate new housing supply outside of London, outstripping the capital in both current and future supply.
Every region of the UK recorded positive growth in future supply, with the planning pipeline in Northern Ireland increasing the most significantly. The East of England and Scotland ranked second and third, respectively.
With 32,395 build-to-rent homes the North West still boasts the largest number of build-to-rent homes outside of London.
However, the research also found that with no uplift in the number of build-to-rent homes under construction in London, and only a 2% rise in the number in planning, the capital’s future growth will remain subdued.
Ian Fletcher, director of real estate policy at the BPF, said: “The build-to-rent sector has shown its resilience throughout 2020, with investors continuing to drive the sector’s growth across every region of the UK. The quantum of planning applications in London, however, is static – suggesting that the capital is having to compete more for investment.
“Throughout 2020, around one in five homes completed in London have been build-to-rent – in the regions this share is lower, despite the volume of build-to-rent homes in the regions now surpassing London. There remains a significant opportunity for the sector to increase its share of completions in our regional cities and towns, further supporting local housing supply ambitions, and this will include more suburban houses that families can call home.”
Jacqui Daly, director of Savills’ residential research, added: “We saw investment and interest in the build-to-rent market continue in 2020 despite the lockdowns. Suburban build-to-rent has had a particularly strong year, proving very popular with customers. Investors have reported high reservations, with demand driven by customers looking for more space for family and work as a direct result of the experience of lockdown.
“Our analysis has identified a pipeline of 8,500 suburban homes in planning and under construction that will help meet this demand for rental homes in locations that can combine more space, good amenities and connectivity. We expect suburban schemes to play a key role in delivering homes in 2021 and in providing high-quality rental housing in regional markets, helping to address housing need, particularly for young families.”