The number of Build-to-Rent projects being started has fallen, but the number of existing projects being completed has risen in the last year, according to the British Property Federation.
- Build-to-Rent Completions: Completed Build-to-Rent homes in the UK rose by 13% over the past year, reaching 88,100 units.
- Overall Growth: Combined, there are 253,402 Build-to-Rent homes that are completed, under construction, or planned, marking a 12% increase in the past year.
- Single Family Housing: This sector is doing well, accounting for 12% of the Build-to-Rent sector, with 28,000 units completed or planned.
- Homes Under Construction: A 9% increase in the number of homes being built, backed by major builders securing deals with investors to fund over 2,000 homes for rent.
- Planning Phase: 13% rise in the number of new Build to Rent homes being planned, now at 111,815 homes.
- Challenges: Despite the growth, the sector faces obstacles like increased building costs and broader economic concerns. Construction starts for the year’s first half dropped significantly, by 55%, with only 5,549 units.
- London’s Situation: A sharp 80% drop in construction starts in London, from 4,415 in H1 2022 down to 836 units this year, mainly due to high land values and bigger capital demands.
Expert Opinions:
- Ian Fletcher (BPF): “Build to Rent is continuing to expand but the sector is not immune to the current economic uncertainty and cost inflation.” Large projects, especially in London, are tough to execute. Yet, smaller projects in other cities and single-family housing still see growth.
- Jacqui Daly (Savills): With anticipated higher interest rates, demand for new homes to buy might decrease, slowing down housing delivery. Build to Rent is vital to keep the housing supply going, and the recent trend of major builders diving into the rental home market boosts this. It’s crucial for various types of players to join in the Build to Rent sector for its steady growth.
In Simple Terms: Build-to-Rent homes are on the rise in the UK, which is good news for those looking to rent. While there are challenges like increased costs and economic concerns, experts believe this sector is important to ensure enough houses for everyone. Especially in cities outside of London, there’s a positive trend in this type of housing.