New data released by the NHBC highlights a significant jump in the volume of new build-to-rent units that were built last year.
Just under 4,800 new build-to-rent units were completed in 2019 – a staggering leap of 57% compared to 2018. The figures prove the fast pace with which the build-to-rent sector and affordable housing schemes are progressing.
Just 1,257 apartments were completed in 2015, when figures were first collated. This number then fell the following year before beginning to grow annually, and 2019’s figures are the greatest increase to date.
‘Corporatisation’ of rental sector
An NHBC commentator said: “These new figures will be music to ministerial ears. Successive Conservative governments have tried their best to encourage the ‘corporatisation’ of the rental market over the past ten years while clamping down on the traditional lettings with new regulations and additional taxes for buy-to-let landlords.”
NHBC’s latest research confirmed that last year around 161,022 homes were constructed across all sectors; the highest figure since 2007 ahead of the financial crisis. The percentage of private sector-built houses was down 3% on 2018 with 112,086 new homes in this sector.
The new housing minister will be using this positive upturn to endorse the government’s commitment to increasing the volume of house building across the UK.
Changing attitudes to renting in the UK
Mollie Crowley, head of lettings at Lurot Brand, commented: “The increase is indicative of a rapidly-changing approach to renting in the UK, suggesting there is significant shift in the way people view renting.
She added: “Increasingly, renters are viewing service as no longer a premium but instead as a core part of the offer.”
Tenant demand in the private rented sector is currently high compared to the amount of stock available, according to a recent report from RICS. It reported that in the three months to January, there had been a steady rise in tenants looking for property to rent, with a similar shift in the other direction from landlords with new listings.
The build-to-rent sector is expected to continue to grow and help to fill this gap. As more people than ever choose to rent instead of buy, today’s tenants are increasingly looking for a higher standard of accommodation, which is something landlords and property investors are now reacting to.
Hospots for build-to-rent
A recent report from Savills, which looked at data from Molior, highlighted a number of key areas in the UK where build-to-rent has seen the most growth.
While London is home to the largest concentration of this build type, it is the regions which have seen the biggest increase in the past 12 months. Manchester, Birmingham, Liverpool, Leeds, Glasgow and Sheffield were all flagged up in the report as the areas with the biggest rise in build-to-rent construction over the past year.
These cities are also some of the top places for property investment in the current market, as both tenants and investors increasingly look away from London for better options. With greater affordability, higher rental yields and major regeneration underway in these areas, they are expected to have the best performing housing markets over the coming years.
Pete Ladhams, managing director of build-to-rent specialists Assael Architecture, said: “The meteoric rise of build-to-rent in the UK last year shows the appetite for genuine alternatives within the rental market.”
“As residential housing shifts towards being more service-led, rental properties are offering residents far more than just a home. With a range of amenities, building-wide social initiatives and boasting great locations, BTR is showcasing what a more professional, secure and high-quality rental product looks like.”
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