The build-to-rent sector is performing strongly in the regions outside of London, with a big new development in Leeds having just started construction.
New research from Savills shows that developments in Manchester and Birmingham as well as Leeds all helped to push the number of build-to-rents outside the capital in Q4 2018 to near parity with London. There were 14,600 homes completed in the regions, just 200 short of London’s figure. And given that there are 24,000 under construction around the country compared to 19,300 in London, the attractions of regional investment in 2019 become clearer.
The City One development in Leeds, just to the south of the city centre, was begun in the latter part of last year and will be boast 1,000 units of rental accommodation when complete. Q4 in 2018 saw building on 4,366 units started with the north-west of England showing the highest number with work to construct 1,737 under way.
Larger build-to-rent developments on the way
The Leeds City One scheme is over twice the size of the next biggest development – Broad Street Tower in Birmingham – but overall there is growing trend for larger build-to-rent schemes. The average size of completed developments in the sector has been 133 units, but for those under construction that figure shoots up to 240.
Taking a look at the sector on a national level, there were 139,500 build-to-rents either planned, being built or finished in 2018, a rise of 22% on the previous year. The ‘under construction’ part of that total is 43,000, a leap of 40% on 2017.
Reflecting on the data, Savills say: “This rapid growth highlights the momentum of the sector which continues to attract significant investment from both overseas and domestic institutional investors.”
Other large new build-to-rent developments highlighted by Savills are three within close proximity in Manchester, Salford and Trafford plus others in Birmingham and Liverpool. With these cities keen to attract new investment and workers, build-to-rent provides a solution to the demand for housing supply.
Increasing numbers of graduates are keen to stay in these regional cities rather than make the once-traditional move to London. New build-to-rents offer the kind of locations and amenities that appeal to young professionals, especially compared to the prospect of saving for a deposit for a home of their own.
Leeds was recently named as the new home for Channel 4, is an important digital hub with Sky and NHS Digital, and will be home to a new service depot for the HS2 rail link.