Newest evaluation from the British Property Federation (BPF) exhibits that the whole variety of build-to-rent (BTR) properties in planning, below development or accomplished continues to extend year-on-year, however the tempo of progress has slowed.
The evaluation, carried out by Savills, exhibits 9% progress within the first quarter of 2023, in comparison with a long-term common of 28% annual progress.
Over the previous yr the BTR market outdoors of London has grown at twice the tempo of the capital – 12% throughout the areas in contrast 6% in London.
A complete of 186 UK native authorities (49%) have BTR of their planning pipeline. The regional planning pipeline is way stronger than London’s, rising 4% quarter-on-quarter and 11% year-on-year to 78,175 properties.
Just lately launched lease controls in Scotland have dampened investor confidence out there there, which the BPF says might lead to fewer properties continuing from planning to development within the coming months. Broader challenges with the UK planning system, together with modifications to authorities coverage and resourcing at native authority stage could make securing permission protracted and paired with construct price inflation, rising rates of interest, and labour shortages, might additionally contribute to an below supply of recent properties, the BPF stated.
BPF director of coverage Ian Fletcher stated: “Construct-to-rent is a important a part of assembly housing want within the UK and it’s optimistic to see that the sector is continuous to develop within the face of a number of macroeconomic and sector-wide challenges. The planning pipeline continues to be sturdy, however there’s an pressing must ship extra of these properties, to alleviate pressures on renters. Regional progress in BTR is promising because the sector continues to increase past the standard city places to secondary cities and cities.”
Savills affiliate Man Whittaker added: “After 4 consecutive years of record-breaking funding, it’s no shock that the newest quarter’s knowledge exhibits the variety of properties below development nonetheless at an all-time excessive, at simply shy of 49,500 properties. This progress seems set to proceed: our latest survey of the European funding neighborhood discovered that by 2025, half of all traders – up from 37% right now – anticipate over 25% of their belongings below administration to be allotted to the ‘dwelling’ sector.
“The geographical attain of build-to-rent has additionally continued to develop: 1 / 4 of native authorities at the moment have properties below development, in comparison with 10% in 2017. This has been supported by the emergence of single household rental, which loved a document quarter in Q1 2023, with almost £500m invested.”