BTR's Milestone Moment As Data Shows It Provides One Fifth Of London New Build Homes
The revelation comes in new British Property Federation/Savills data that showed 26,625 BTR units had been completed in total in London by the end of 2020. This represents an 8% increase on last year.
But the data also shows the wave of investment in BTR now reaching the UK’s furthest geographical extremes, with hectic growth rates in Scotland, Northern Ireland and the east of England. This reflects growth in suburban build-to-rent grows.
The research showed that the number of completed build-to-rent homes in the UK increased by 23% in 2020, signalling the sector’s resilience during the COVID-19 pandemic.
Build-to-rent delivered 4% of all new homes, and around a fifth of all new homes in London, in the final quarter of 2020.
But 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 sector's future growth in the capital will remain subdued.
Growth in the suburban market is changing the sector. Savills' analysis has identified a pipeline of 8,500 suburban homes in planning and under construction. The firm says it expected suburban schemes to play a key role in delivering homes in 2021.
With 32,395 build-to-rent homes — complete, under construction or in planning — the north west still boasts the largest number of build-to-rent homes outside of London. But growth in the region slowed, with the total under construction down by 23%.
Drops in the number of build-to-rent homes under construction in the north east (-38%) and south west (-19%) are positively backed by significant increases in the number of homes in planning, suggesting a healthy future pipeline for the sector in these regions, the BPF said.
Equally, a drop in the number of homes in planning in the south east (-24%) is positively supported by an increase of 118% in the number under construction, demonstrating that developments are successfully getting through the planning system.
The fastest growth is coming in those markets where BTR is still a novelty. In Scotland, BTR units under construction grew from just 324 to 940, whilst the planning pipeline swelled from 6,900 to 9,300 (up 62%). Even faster levels of pipeline growth were evident in Wales, the east of England and Northern Ireland, although levels of completions hardly moved and in some cases, no construction at all had taken place.
“The quantum of planning applications in London, however, is static suggesting that the capital is having to compete more for investment," BPF Director of Real Estate Policy Ian Fletcher said. "There remains a significant opportunity for the sector to increase its share of completions in our regional cities and towns.”