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Build-to-Rent Home Construction Soars 40%

According to recently published research by the British Property Federation (BPF), the number of build-to-rent homes being built across Britain has gone up by close to 40%.

The data arrives in the wake of a new government housing policy that includes a revisited National Planning Policy Framework that guides local authorities when processing applications for build-to-rent homes.

139,508 build-to-rent homes have been completed, are under construction, or are in the planning stages, which is 22% over the year before. The number of homes completed has gone up by 29% while those in planning have increased by 10%.

The number of completed build-to-rent properties across Britain (14,615 ) has, for the first time, caught up with London’s total of 14,801.

Developments in the UK regions continue to be approved more quickly, with 24,010 properties under construction and 19,304 in the capital.

The research has also examined the capacity of strategic sites across the UK earmarked for build-to-rent. 22,642 homes have been identified by developers and local authorities for building on these sites.

In London, 30% of build-to-rent homes have been completed through Permitted Development Rights (PDR), but PDR constitutes less of London’s future pipeline with only 9% currently in planning and under construction.

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The build-to-rent sector’s has always used PDR sparingly, with only  74 build-to-rent developments having used it in London and around 5000 office-to-residential projects across the UK.

Build-to-rent has been able to diversify as it continues to grow, with 15% of schemes including homes instead of traditional high-rise apartments.

Last year the Prime Minister called for the private rental sector to provide longer-term tenancies that are family-friendly. The build-to-rent sector has committed to providing them, in order to ensure more predictability and stability in the rental market.

British Property Federation Director of Real Estate Policy Ian Fletcher said that the revised National Planning Policy Framework represents a bright future for build-up-rent. UK planning policy has never enshrined such a measure and it will only increase the number of local authorities that are witnessing the benefits of build-to-rent in increasing the supply of much-needed housing across the country.

Mr. Fletcher said that PDR was originally designed as a response to failure in planning policy, where too many office buildings sat vacant for a long time. PDR has clearly supported the build-to-rent sector’s growth but its use has declined and the trend is likely to carry on.

Jacqui Daly, residential investment research and strategy director at Savills, said that it was not surprising that permitted development constitutes such a large share of completed schemes because it has served as an easy vehicle for build-to-rent.

Ms. Daly said that ultimately, investors need volume, such as schemes involving over 250 units, and this can’t generally be achievef by converting a building. Planning changes will make it much easier to get bespoke developments started, which will accommodate investor requests for bigger portfolio offering stable and long-term income streams.

Specialists in Construction Insurance

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