Press Releases

13 May 2024

BtR completions now outpace starts as planning backlog squeezes pipeline

- New analysis from the BPF and Savills shows slowdown of activity in the first quarter of 2024.
- Constrained supply sees number of units under construction fall -16% in London and 1% in the regions.
- Number of homes with detailed planning permission is the highest on record at 59,000.

 

New analysis published today by the British Property Federation (BPF) shows delivery across the Build-to-Rent (BtR) sector has slowed in the first quarter of the year, with key pinch-points in the delivery pipeline creating a bottleneck on supply.

 

The analysis, conducted in collaboration with Savills, found that completions now outpace starts on an annual basis, with the latter now standing at 12,500 in total.

 

There has been a contraction in the number of homes currently under construction, down -6% compared to Q1 2023 and -33% from the 2017-2019 pre-covid average. In London, the fall has been significantly larger at -16%, while the regions have fallen by -1%.

 

The slow-down in new starts points to the ongoing challenges in the sector, including build cost inflation and significant planning delays. According to BPF research produced in the previous quarter, 40% of BtR sites take at least a year to achieve planning consent.

 

The total number of BtR homes in planning saw a slight fall of -1% between Q1 2023 and Q1 2024, to 108,900 homes. Despite this, the number of homes with detailed planning permission is the highest on record at 59,000 as the sector continues to push towards the self-set target of delivering 30,000 units per annum - a 10th of the government’s national housing target of 300,000 homes a year.

 

Encouragingly, the number of local authorities with BtR in their pipeline has increased, standing at 208. This means that in the 12 months to Q1 2024, a total of 22 new local authorities have added BtR to their supply of homes.


The report shows that between Q1 2023 and Q1 2024, the total sector pipeline, which includes completed homes, those currently under construction or those in various stages of planning, grew by 4% overall. The total sector pipeline now stands at over 265,000, with the regional BtR market growing by 4% compared to 3% in London.

 

Earlier this 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 build-to-rent homes a year.

 

Ian Fletcher, Director of Policy, British Property Federation, comments: “The number of Built-to-Rent homes receiving detailed planning permission is the highest on record, which is testament to the strength of the product, investor appetite, and consumer demand for homes for rent. While it is encouraging that the sector continues to grow, the sector has faced a challenging 18 months. The sector needs to grow, so it can service huge rental demand, but policy decisions, such as the shock Budget announcement to abolish multiple dwellings relief, hinder rather than help the sector.”

 

Guy Whittaker, Head of UK Build to Rent Research at Savills, added: “Amid slowing build cost inflation, the number of completions in Q1 2024 has overtaken the number of starts for the second quarter in a row, widening to 3,404 homes from a gap of 421 homes in Q4 2023, suggesting that investors are prioritising existing schemes over new ones. Although starts are subdued, it is encouraging to see that there are a still number of homes at the construction and permission stage which have the potential to then support the starts we are lacking and contribute to more completions in 2024.”

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