Planning reforms help boost Build to Rent developments

The Build to Rent (BTR) sector continues to boom, with developments outside London now catching up with the capital.

Research by the British Property Federation (BPF) and Savills found that the number of completed developments was up 29% annually at the end of the fourth quarter of 2018 to 29,416.

The number under construction was up 39% to 43,374, while 10% more are in planning at 66,718.

The analysis shows that the total number of completed BTR homes across the UK regions (14,615) has caught up with the total of 14,801 in London.

The research also found that developments have been helped by permitted development rights that allowed buildings to be converted to residential use without planning permission.

Ian Fletcher, director of real estate policy at the BPF, said: “With the revised National Planning Policy Framework asking local authorities to identify how many new rental homes their respective areas need, the future should remain bright for BTR.

“This has never before been enshrined in UK planning policy and will only add to the growing number of local authorities that are seeing the benefits in adding much-needed housing supply across the UK.”

Jacqui Daly, director of Savills residential investment research and strategy, said: “Changes to planning will make it much easier to get bespoke developments off the ground, which will match investor demand for sizeable portfolios offering long-term stable income streams.”

Region

Number of BTR homes

London

72,767

North West

33,191

South East

8,429

Yorkshire & The Humber

7,606

West Midlands

7,112

Scotland

3,745

South West

2,065

East Midlands

1,773

East

1,311

North East

1,059

Northern Ireland

255

Wales

195

It has also been helpful for agents with dedicated BTR divisions.

Robert Nichols, chief executive of Portico Property, said: “There’s no doubt that the property market is changing, with the rented sector having grown significantly over recent years. Renters want a greater choice of accommodation, they want better quality homes and they want to be part of the local community in which they live.

“BTR has an important role to play in the private rented sector, through its ability to increase the supply of private rented stock, to produce better quality accommodation that is professionally managed, and by creating community hubs. The sector will only continue to grow, as more BTR schemes open up across our towns and cities.

“There is certainly an opportunity for letting agents to generate and build relationships with Build to Rent operators. As experts on the local rental market, letting agents can advise BTR operators and assist them in sourcing renters for their new homes, alongside property management. We would not be averse to assisting institutional investors and Build to Rent operators in the future.”

Kimberley Ellen, project manager at agent Acorn’s BTR division, added: “London and the outer London boroughs have seen a particular surge in schemes over the last few years which have been very well received by tenants across our network.

“The Lewisham Borough and Croydon are good examples of the explosion in BTR, but we have also launched numerous sites outside of London which have been just as popular, proving that if you build well, offer value and security, and maintain your building, tenants will come, but more importantly, they will stay.

“Whilst institutional investors have long chosen this as a market to operate in, we have seen more and more local / regional house builders now turning to BTR as a real investment solution, instead of traditional build to sell.”

Meanwhile, B2R developer The High Street Group of Companies has announced a further development of 224 apartments in Newcastle to add to its ten sites worth more than £1bn.

The developer is currently constructing Newcastle’s tallest building, the 27-storey Hadrian’s Tower at 82 metres high, and will now build 224 apartments close to the River Tyne for its Pottery Lane plot.

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One Comment

  1. LettingsGuru199778

    If Acorn is “an expert” than everybody is an expert. I have never seen a worse agent in my life, and had the displeasure of marketing a few properties aside of them (don’t worry – we got the deal..). Any PRS landlord working with them is either a clown or a fool

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