Build to rent (BTR) has been attracting a lot of attention for many years in the UK. Tipped by many to be the ‘beginning of the end’ for traditional buy to let (BTL) landlords operating in the private rental sector (PRS), it is worth looking at how big the sector has become here since 2010, when construction started on some of the first build to rent units.
The most reliable data is produced in a partnership between Savills and the British Property Federation (BPF). The headlines you are most likely to read in the media are along the lines of build to rent being a ‘rental market revolution’ or ‘growth in build to rent continues to soar’ etc. Even the latest (Q1 2022) Build to Rent update from the BPF starts by saying that the BTR sector ‘has grown by 14% on a year-on-year basis from Q1 2021. Over 225,000 BTR homes have now either been delivered or are in planning in the UK.’
Traditional landlords in the UK would be forgiven for looking over their shoulders and muttering ‘our days are numbered’. However, here is a headline that you will not see in any mainstream media, despite being completely true: ‘In the past 12 years build to rent has provided the equivalent of 6,000 homes per year.’
As stated earlier, construction started on the first BTR units in the UK in 2010, but 12 years later just over 72,000 units have been completed. Much of the confusion around BTR is the fact that the size of ‘the sector’ and the dozens of headlines that report on ‘the build to rent sector’ include the number of units that are ‘under construction’, have ‘detailed planning permission’ (but have not commenced construction), have been mentioned in a ‘detailed application’, or, my personal favourite, those units that are counted as being under ‘long-term planning.’
From the 225,000 homes in the BTR sector, over 30,000 of them are currently in ‘long-term planning’. This extra sub-sector was added to the overall size of the BTR sector back in 2018 and in the four years since then not even 1% of these 30,000 units in long term planning have even started construction, according to the latest BPF report. Maybe it should be changed to ‘very long-term planning.’
