Press Releases

16 Jul 2024

BtR completions surge to record high with 22,000 homes delivered over 12 month period

 

  • New analysis from the BPF and Savills shows completions dominated Q2 to reach record levels
  • Completion rate for the previous 12 months now 2.5x the average for period 2017-19
  • BtR sector now making a significant difference to supply across those local authority areas which have chosen to embrace it
  • But starts on sites continue to fall, most noticeably in London.

 

New analysis published today by the British Property Federation (BPF) shows delivery across the Build-to-Rent (BtR) sector has reached a record high at the end of the second quarter, with completion levels hitting 22,000 over the preceding 12 months.

The analysis, conducted in collaboration with Savills, found that completions are now running at over two and a half times the average for the period 2017-19 and are now starting to make an appreciable difference to housing delivery across a growing number of locations within the UK.

This when included with those homes under construction, or with planning approval, has resulted in a year-on-year growth for the sector of 4%, with the regional BtR market now leading London. 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.

Following this exceptional growth, the total number of completed units now stands at 115,778 having surpassed 100,000 in the previous quarter. Though for the third quarter in a row the number of completions has remained above the number of starts, with the gap between the two now widening to 10,600 homes, up from 3,400 in the previous quarter.

This is reflected in the 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. Across 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 impacted by economic and political uncertainty.  

On a more positive note, the total number of BtR homes in planning remain at near record levels with a pipeline of 57,000 homes. Supporting this, the number of consented homes has risen by 17% compared to Q1 2023, though applications have not kept pace with consents, with the number of homes at detailed application stage currently down -31% over the same period.

The number of local authorities with BtR in their pipeline has remained the same as the previous quarter, standing at 208. Though there is strong expectation that these numbers will increase in the H2 of the year.

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 build-to-rent homes a year. These representations continue following the election of the Labour government and the development of its detailed policy programme.

Ian Fletcher, Director of Policy, British Property Federation, comments:

“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 need and consumer choice. 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. 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.”

Guy Whittaker, Head of UK Build to Rent Research at Savills, added:

“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 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 been struggling. It is clear though that more must be done to encourage the number of units under construction to address the -19% decline seen over the past 12 months. This will ensure a steady flow of new homes comes forward to meet demand and meet the wider regenerations benefits  of BtR."

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