New analysis reveals that the UK build-to-rent sector is gathering steam despite pandemic uncertainties that many feared would hamper future progress.
Construction sites across the UK ground to a halt, or at least started running with skeleton crews, during the initial stages of the COVID-19 pandemic which reduced the delivery of build-to-rent developments to the market, but the good news is that the industry now appears to be picking up pace once again.
Between Q3 2020 and Q3 2021, the number of build-to-rent developments coming to the market increased by 26%, from 50,798 completions up to 63,950.
As for quarterly completions, in Q3 2021 they were up by 39% compared to Q3 2020, but the impact of the pandemic is still clear to be seen as those completions remain down -49% on pre-pandemic levels in 2019.
Despite completions struggling to catch up to pre-pandemic levels, real optimism comes from analysing the construction and planning figures. In essence, more developments than ever are on the way to the open market.
The number of build-to-rent developments under construction was up 8% between 2020 and 2021 and, more impressively, up 10% between 2019 and 2021.
Furthermore, between 2020 and 2021, the number of developments in the planning stage also increased 10%, from 90,412 to 99,543.
In conclusion, while build to rent development in the UK is still struggling to deliver units on the scale it was doing before the pandemic, the numbers are on the rise and could possibly pass pre-pandemic levels within the next 12 months as construction and planning are all up on pre-pandemic rates already and this growth will likely keep increasing.
With the sector performing well in the wake of the pandemic and poised for a period of boom, the benefits of build-to-rent development are clear, most notably the fact that the average build-to-rent asking rent is 5.2% higher than general private renting; £1,323 per month compared to £1,258.
CEO of Manor Interiors, Farhan Malik, commented:
“The rise of the build-to-rent sector has been astonishing. Developers and tenants alike have taken to the sector with an eagerness rarely seen.
For tenants, it represents a step up from the traditional rental market with higher quality homes, more freedom, focussed around the community and amenities that modern tenants want and expect.
As such, they’re willing to pay more rent than they would for a traditional private rental home.
That’s why, for developers, build-to-rent represents an entirely new avenue of revenue generation, with higher rental values and longer tenancies with much lower levels of turnover.”