The number of build-to-rent homes that have been completed, are in construction or being planned across the country has risen by 30% to 117,893 in the past year to the end of March.
The following chart shows the number of UK homes built specifically with a view to being rented out and professionally managed (build-to-rent model).
Total number of build-to-rent homes recorded at the end of Q1 2018 and Q1 2017
Jacqui Daly, a director in the research team at Savills, who conducted the research for the BPF, said: “The development pipeline is growing slowly at both ends. At this rate of growth, we expect that the build-to-rent pipeline could double to around 200,000 within the next two years.”
London is leading the way but other cities are following suit. Outside London, the North West leads with the highest volume of build-to-rent homes complete, under construction and in planning. Balfour Beatty is set to start work on a 274-flat build-to-rent scheme in the New Cross area of Manchester city centre.
Build-to-rent attracts long-term institutional investors because it offers a stream of rental income that can pay for things such as pension liabilities. It offers a way to generate an income stream, as well as helping to meet housing targets, which is driving the growth and means councils and housing associations are increasingly partnering with developers on build-to-rent schemes.
The research revealed traditional houses are increasingly being built, and 17% of schemes in the pipeline include houses, rather than just typical high-rise apartments. This challenges the typical high rise flats scheme that were initially more popular with investors.
Dominic Raab, Housing Minister, said: “The 45% increase in completed build-to-rent homes is good news, but we’re restless to do more. Our revised National Planning Policy Framework is a crucial next step in supporting the build-to-rent sector, reforming planning rules, and helping to deliver 300,000 homes a year by the mid 2020s.
This government is backing reform with £4.1bn to fund the roads, schools and medical centres needed to reinforce our local communities, as we build the homes Britain sorely needs.”