UK Build-to-Rent Completions Hit Record High in Q2 2024 | RWinvest Skip to content

UK Build-to-Rent Completions Hit Record High in Q2 2024

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    Build-to-Rent Sector Grows 4% Year-on-Year

    Delivery in the build-to-rent sector surged to a record high in the second quarter of 2024. Over the past year, 22,000 completions have taken place, which is over two and a half times the average for the period 2017-19. According to recent analysis from the British Property Federation and Savills, the sector has started to make an appreciable difference in housing stock across a growing number of locations within the UK.

    This number, combined with homes currently under construction and those with planning approval, makes for yearly growth in the sector of 4%. The total sector pipeline is now close to 262,000 new homes. This shows exceptional growth compared to the five-year average of total housing completions of all tenures across England of 210,000 homes per year. This growing sector is getting a reputation as one of the best things to invest in right now in the UK.

    Guy Whittaker, Head of UK Build to Rent Research at Savills, commented: “We have seen exceptional growth in the number of completions in just a single quarter, with a 24% increase over the preceding 12 months. This has been led by growth across the regions, with the year-on-year increase being 31% compared to London’s 15%. This means that BtR is making an increasing contribution nationwide to housing supply at a time when other tenure types have been struggling.”

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      Starts on Site Slow Down, Especially in London

      Looking at the current levels of completion, London is leading the way in the regional build-to-rent market. However, starts on site have declined, most noticeably in the capital. Across the past 12 months, there were only 11,500 starts in total. This is down 30% from the 2017-19 Q2 average.

      For the third consecutive quarter, the number of completions taking place outnumbered the number of starts on site. The gap between these two figures is now 10,600 homes, a significant increase from last quarter’s 3400.

      The number of homes currently under construction has decreased by 19% compared to last year. This drop is even steeper in London, with a contraction of 21%, leading to fewer investment opportunities in London.

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      Build-to-Rent May Accelerate in Second Half of 2024

      This slowdown points to the ongoing challenges in the build-to-rent sector. According to the British Property Federations’ report, this includes economic and political uncertainty, build cost inflation, and high borrowing rates.

      But there is improvement on the horizon. The total number of build-to-rent homes in planning is still near record levels, with 57,000 dwellings in the pipeline. The number of consented homes has also risen by 17% compared to Q1 2023, although it’s worth noting that the number of homes at the detailed application stage is currently down 31% in the same period. The number of local authorities with build-to-rent developments in the pipeline is unchanged from the previous quarter, standing at 208. However, this is anticipated to increase in the second half of 2024.

      Ian Fletcher, Director of Policy, British Property Federation, said: “The number of Built-to-Rent homes being completed is now at a record high, and the sector is starting to make a demonstrable positive impact on meeting housing needs and consumer choice. This, along with the continued steady growth of the sector, is a testament to the strength of the product, investor appetite, and consumer demand for homes for rent. However, more action is needed to convert planning consents to starts on site and bring new schemes forward through the planning process. We need continued growth to service huge rental demand and look forward to working with the new government to make that happen.”

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      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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