Build-to-Rent completions up 13% but construction starts plummet

The number of completed Build-to-Rent homes in the UK has increased by 13% in the past year to 88,100 units despite market conditions slowing development activity, according to new analysis by the British Property Federation.
The research, undertaken in partnership with Savills, also shows the total number of BTR homes completed, under construction or in the planning pipeline stands at 253,402, up 12% in the past twelve months. Single-family housing continues to expand strongly with 28,000 units completed or in the pipeline, accounting for 12% of the BTR sector.
The number of homes under construction increased by 9%, buoyed by major housebuilders agreeing forward funding transactions with investors equating to over 2,000 homes for rent. Meanwhile, the number of new BTR homes in the design and planning phase increased by 13% to 111,815.
However, the effects of build cost inflation and wider economic uncertainty look to be leading to the slowdown of delivery, with construction starts totalling 5,549 units in the first half of the year, 55% down on the same period in 2022. In London, where high land values mean schemes are typically larger and more capital intensive, construction starts totalled just 836 units, down 80% year-on-year.
Ian Fletcher, policy director of the British Property Federation, said: “Build-to-Rent is continuing to expand but the sector is not immune to the current economic uncertainty and cost inflation. At the current time, it is very challenging to deliver large-scale capital-intensive schemes, particularly in London, but there are fewer obstacles to the delivery of smaller developments in regional cities and single-family housing both of which continue to grow as a proportion of housing supply in UK cities.”
Jacqui Daly, director of residential research and consultancy for Savills, commented: “With interest rates now expected to stay higher for longer demand for new homes for sale is likely to be weaker which will constrain housing delivery. Build-to-Rent will have a key role to play in maintaining overall housing supply, and in the last quarter we have seen examples of major housebuilders agreeing to deliver a pipeline of rented homes, which has boosted the pipeline. The continued diversification of the profile of BTR deliverers is critical to its continued growth.”
Did you like this? Share it:



Source link