Number of completed BTR homes rising by 14% year-on-year
The number of completed build-to-rent (BTR) homes could increase by five times to 380,000 by 2032, with the sector worth £170 billion, research from the British Property Federation and real estate firm Savills has predicted.
The study also projected that by 2032, around 8% of UK homes for rent will be purpose-built, up from 1.5% today. Single-family homes are also expected to make up almost a fifth (18%) of BTR stock in 10 years’ time compared to 12% today.
Today, £30 billion has been invested into the BTR sector, delivering 76,800 completed homes and a further 163,400 in the planning and delivery pipeline. While the sector still represents a small proportion of new housing delivery, it is growing rapidly with the number of completed BTR homes increasing by 14% year-on-year in Q3 2022.
Developers and investors initially focused on London, but since 2017, there has been a shift towards other core UK cities, led by Manchester, Birmingham, and Leeds. Local authorities are now planning more effectively for the delivery of BTR homes, with 47% of local authorities now having BTR in their housing pipelines, versus just 20% in 2017.
Read more: Savills: UK sees influx of Build to Rent homes.
“The current market conditions underline that we must continue to diversify housing supply in order to drive economic growth,” Ian Fletcher, director of policy at British Property Federation, said. “The government must continue to look at how planning reform, more support for local authorities, and the release of land for development can enable the sector to continue its upward trajectory.”
Jacqui Daly, director of residential research at Savills, added that demand for high-quality, professionally managed homes for rent was only going to increase, not only for the core demographic of graduates and young professionals but for single families, couples, and individuals at all life stages.
“This underpins our projection that we will see huge growth in the sector over the coming decade as institutional investors look at asset classes that can deliver sustainable returns and align with their ESG strategies,” Daly said.