The Greater London Authority (GLA), in its annual housing report, revealed a notable growth in the BTR sector. In 2022 alone, nearly 7,000 new BTR homes began construction. This marks a significant 50% leap compared to the figures from the previous year. That’s a substantial number of new homes and could signal a shift in the type of properties being favoured in London’s bustling property market.
A Closer Look at Completions
However, while the start of new projects paints a rosy picture, there’s another side to the coin. The report indicated a 42% decrease in the number of completed homes between 2021 and 2022. Diving deeper, it’s observed that there was a whopping 60% drop in homes completed specifically in Inner London. This points towards possible delays or challenges in the construction phase, especially in the densely populated areas of Inner London.
BTR Providers Making Big Moves
The last few years have been particularly interesting in terms of who’s buying the new market homes in London. From the end of 2019 to mid-2023, BTR providers emerged as the leading buyers of new homes in large London developments. Their influence in the market was evident in 2021 as the number of sales to BTR providers saw a significant surge.
However, the tide seemed to turn in late 2022 and the trend continued into the first half of 2023. During this period, sales to BTR providers made up only 29% of total sales. A noteworthy shift from their previously dominant stance.
An Overview of London’s Housing Stock Growth
Shifting our focus from BTR homes to the broader housing landscape, the GLA’s latest annual monitoring report cited that a total of 38,202 homes were added to London’s housing stock in the fiscal year 2021/22. This is an impressive 13.5% growth when compared to the 33,656 homes that began construction in 2020/21.
Concerns in the Affordable Homes Segment
While the BTR sector and overall housing stock show encouraging trends, there’s an area of concern. As of recent news, the 2021-26 affordable homes programme in London has yet to see the start of any homes. Given the importance of affordable housing in ensuring a balanced property market and city demography, this raises questions about future strategies to address the need.