The latest analysis from Foxtons, a leading estate agency, highlights the BTR sector’s continuing rise. As of now, BTR homes represent almost 2% of all privately rented properties nationwide, a figure that climbs to a remarkable 4.2% within London. This proportion is the highest since records began in 2018, underscoring the sector’s growing appeal among renters.
Since 2018, the annual number of BTR completions (a measure of the market’s stock) has been meticulously tracked against the total private rented sector (PRS) stock. Initially, BTR homes accounted for a mere 0.6% of the 5.5 million privately rented homes. Fast forward to today, and the landscape has dramatically changed, with BTR units now comprising 1.8% of the total rental market stock, showcasing a significant uptrend in preference and development.
London is at the forefront of the BTR boom. The city has seen BTR completions jump by 61% since 2018, now making up 4.2% of its total PRS stock. This growth not only highlights the sector’s increasing market share but also its critical role in meeting the capital’s housing needs.
Driving Factors Behind the Boom
Sarah Tonkinson, Foxtons Institutional PRS and Build to Rent Managing Director, points to a “phenomenal growth” within the sector, especially noted in London. This surge is attributed to the BTR sector’s ability to meet the evolving expectations of renters who are increasingly seeking quality, security, and certainty in their rental agreements. The demand for longer tenancy agreements and higher-quality living spaces is on the rise, and BTR developments are uniquely positioned to fulfill these requirements.
A Look Ahead
Despite its remarkable growth, the BTR sector is still considered to be in its infancy, with enormous potential for further expansion. As societal trends continue to shift towards longer-term renting, the demand for BTR homes is expected to rise. This demand will likely spur an increase in stock levels, further solidifying the sector’s role in satisfying the changing needs of renters.