BPF & Savills: record delivery for the UK’s Build-to-Rent sector

The UK’s Build-to-Rent sector is going from strength to strength, as new research by the British Property Federation and Savills shows that delivery reached a record high at the end of Q2 2024, with completion levels hitting 22,000 over the preceding 12 months.

“The number of BTR homes being completed is now at a record high and the sector is starting to make a demonstrable positive impact on meeting housing need and consumer choice,” said Ian Fletcher, director of policy, British Property Federation. “This, along with the continued steady growth of the sector is testament to the strength of the product, investor appetite, and consumer demand for homes for rent.”

Completions are now running at over two and a half times the average for the period 2017-19. If homes under construction or with planning approval are included a year-on-year growth for the sector of 4% is revealed, bringing the total sector pipeline close to 262,000 new homes, or just over the five-year average of total housing completions of all tenures across England of 210,000 dwellings per year.

“We have seen exceptional growth in the number of completions in just a single quarter, with a 24% increase over the preceding 12 months,” said Guy Whittaker, head of BTR Research, Savills. “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 nation-wide to housing supply at a time when others tenure types have been struggling. It is clear though that more must be done to encourage the number of units under construction.”

There has been a sharp contraction in the number of homes currently under construction, down -19% compared to Q2 2023. In London, the fall has been more acute at -21% to 13,200, compared to the regions which have fallen by -19% to 32,200.

During the period Q2 2023 to Q2 2024 there were only 11,500 starts in total, down -30% from the 2017-19 Q2 average. The continued slow-down in new starts points to the stickiness of the ongoing challenges in the sector, including build cost inflation and cost of debt. More generally, investors have been affected by economic and political uncertainty. 

“More action is needed to convert planning consents to starts on site and bring new schemes forward through the planning process,” said Fletcher. “We need continued growth to service huge rental demand and look forward to working with the new government to make that happen.”

At the start of the year, the BPF’s 2024 manifesto ‘Building Our Future’ called for the industry’s partnership with the next government should give investors long-term confidence to boost building of new homes with a target of 30,000 BTR homes a year. These representations continue following the election of the Labour government and the development of its detailed policy programme.