Build-to-rent: Manchester leads the way as sector shows signs of life

builders

There are more than 5,500 build-to-rent properties – purpose-built, professionally managed rented homes – under construction in Manchester and Salford alone according to figures from the British Housing Federation.

This is close to the 6,262 build-to-rent properties under construction in the capital, and far more than in London when considered on a per capita basis.

This is the first time that the British Housing Federation, in association with Savills, have published build-to-rent statistics, and they will continue to release data on a quarterly basis after these initial findings.

The spotlight was first placed on the build-to-rent sector in 2013 when the government made £1bn available in loans to developers in an effort to reach their target of one million new homes by 2020.

After an initially underwhelming response to the scheme it appears that interest may be picking up. Theresa May’s recent housing white paper emphasised the need for longer-term more affordable tenancy options and made it easier to get planning permission for these ventures.

The research, from Savills and published by the British Property Federation, found 69,824 new Build to Rent homes across the country, either completed, under construction or in planning.

In total just 13,277 of these had been completed while the majority – 40,000 – were still in the planning stages.

Of the 16,506 properties under construction 10,244 were located outside London, with more than half of these in Manchester and Salford.

Build-to-let developments tend to be small in size

Investors spearheading the nascent sector have found achieving scale to be a significant challenge.

There is still room for major improvement on this score, but the research found signs that the size of build-to-rent developments is generally getting larger.

Twenty-four developments currently in planning will deliver over 500 new rented homes each, whereas completed developments up until now have mostly delivered under 100 homes each.

In a further sign that momentum may be gathering in the sector, Legal and General announced a £600m fund for build-to-rent developments in January.

Ian Fletcher, Director of Real Estate Policy, British Property Federation said: “The UK’s build-to-rent sector has reached a significant milestone today, proving for the first time that the sector is making its mark across the regions.

“While the government now better recognises that we need a housing sector firing on all cylinders across the UK, our data is a timely reminder of build-to-rent’s contribution to solving the housing crisis. This research will further professionalise the sector, ensure it is transparent and allow us to track its growth at a time when housing is at the top of government’s agenda.”