There are now 148,046 Build to Rent homes complete, under construction or in planning across the UK, up 20% compared to last year, with then number of completed units up 31%, new research has found.
The Build to Rent sector is growing from strength to strength, according to the research commissioned by the British Property Federation (BPF) and produced by real estate consultants Savills.
Overall, the Build to Rent pipeline has grown considerably in the year to the third quarter of 2019 with the number of units in planning up by 23% to 77,446. The average size of Build to Rent developments is also growing, indicating the confidence that investors have in the sector.
Indeed, in the third quarter of 2019, the average size of each completed scheme was 133 units, this increases to 245 units for the schemes under construction, while the average size of schemes in the planning system is higher still at 325 units.
The report points out that the larger size of Build to Rent schemes underlines the growing importance of the sector in increasing UK residential supply and meeting Government house building targets.
Geographically, growth of the sector is spread evenly between London and the regions, with both areas seeing total growth of 20%. The number of Build to Rent units inside the capital and in the regions is also similar at 63,200 and 60,337 respectively.
However, in terms of units completed the regions saw the biggest increase, with a significant rise of 41% over the year to the third quarter of 2019.
‘The Build to Rent sector continues to attract investment and deliver much needed homes. Not only do we have an impressive 31% growth in completions between the third quarter of 2018 and the third quarter of 2019, but the pipeline of new projects is also strengthening,’ said Ian Fletcher, director of real estate policy at the BPF.
‘Right across the country we are seeing growth in the sector, allowing people to access high quality, institutionally-managed rental properties. With both Labour and the Conservatives prioritising house building during their recent party conferences, our data shows Build to Rent is making an important contribution to housing delivery and often on difficult to develop and large urban sites,’ he added.
According to Jacqui Daly, director of Savills residential research, as individual households increasingly cannot afford to access the housing market, particularly once help to buy is withdrawn, so demand for the quality rented homes the sector provides will rise.
‘Build to Rent already makes a significant contribution to housing delivery, and we project this will increase to one in five new homes as more and more people rely on renting. This will change the housebuilder model, with bulk sales to investors growing their share of housing delivery,’ she pointed out.
‘In our opinion, in 10 years, the customer lists of house builders will see pension funds and life insurers alongside first time buyers and second steppers. Rather than shouldering the full burden of risk, house builders will act as master contractors, forging long term partnerships with landowners and investors,’ she added.