Surge in build-to-rent sees London overtaken by UK regions
For the first time, the total number of build-to-rent homes across the UK’s regions has surpassed those in the capital – another sign that London’s property market heyday is over?
The figures may be marginal, but as of the last count by the British Property Federation (BPF), the number of build-to-rent properties either planned, under construction or completed across the UK’s regions outside the capital has now reached 62,021, edging past London’s total of 62,016.
This is significant because the capital has always been at the forefront of the relatively new emerging market of build-to-rent construction, as it has historically been home to the highest proportion of renters compared to homeowners – and it seems that the tables are now turning.
Across the country as a whole, the BPF and Savills data shows a jump from 117,893 build-to-rent units either completed, under construction or in the pipeline in the first quarter of this year, up to the current level of 124,037 for the second quarter, which shows how quickly the sector is progressing.
A turning point in UK housing
Ian Fletcher, director of real estate policy at the BPF, said: “This is a significant landmark moment for build-to-rent, with the sector’s total number of homes across the UK’s regions overtaking London’s total for the first time ever. Clearly, recognition of build-to-rent’s potential to deliver much-needed new, high-quality rental homes is gathering momentum across the country.
“Investors in build-to-rent are keen to develop quicker and at higher density, and the sector has much to offer to accelerate housing delivery on large, urban strategic sites.”
Build-to-rent developments, which are specifically aimed at the UK’s expanding Generation Rent demographic looking for convenient, high quality accommodation with more amenities than traditional buy-to-let, offer an opportunity for investors looking for good rental returns in professionally managed and purpose-built sites.
Top cities for build-to-rent growth
In places such as Manchester, Liverpool, Birmingham and Bristol in particular, build-to-rent is becoming an increasingly vital part of the new-build landscape, particularly as more university graduates are looking to stay on in these regional cities rather than make the move to London as they may have once done. Build-to-rent offers such tenants a convenient location with a better quality of life, which young professionals are happy to pay more for.
Jacqui Daly, director, Savills residential investment research and strategy, added: “There is growing evidence that large sites need a range of tenures to speed up build out rates and that build-to-rent should be part of the mix.
“By bringing in a forward funder, build-to-rent can also help de-risk large schemes, creating an early sense of place as tenants move in, and footfall for on-site amenities.”
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