Over 30,000 Build to Rent homes now complete in the UK
Build to Rent (BTR) reached another milestone at the end of Q1 2019 with over 30,000 homes now complete. This represents an increase of 34% on the same time last year. The growth in completed units follows steady expansion in construction within the sector. The number of BTR units being built at any one time has increased by c. 7k – 8k each year since the start of 2015. Schemes are increasingly coming through in a variety of places across the country with M&G, Longharbour and A2Dominion all completing schemes outside the capital in the past quarter.
The number of completed homes contributes to the growing scale of total BTR in the UK. By the end of Q1 2019, there were over 140,000 homes complete, under construction or in planning. This figure is 13% higher than that identified at the end of Q1 last year.
The continued expansion of both the wider sector and individual schemes reflects a growing belief in BTR. Schemes submitted through planning and entering construction phases continue to increase in size with the average BTR scheme in planning now over 320 units.
As this confidence grows we are seeing more entrants to the market. The announcement of Goldman Sachs backing Moda’s Broad Street scheme in Birmingham is an instance of mainstream institutional capital joining a sector of largely specialist investors.
The first quarter of 2019 has seen a great deal of BTR homes entering their construction phases or indeed building out. In Q1 2019, we identified four schemes starting construction for a total of over 1,200 homes. One of these schemes was the previously mentioned Broad Street scheme, set to be the largest residential tower in Birmingham. As far as completed schemes have gone, the start of the year has been just as active.
There were 10 schemes completed in in Q1 2019 for a total of over 1,400 homes to rent. Interestingly, two of these were house-led schemes accounting for a total of 280 homes. This comes as more and more institutions take on the opportunity of partnering with major housebuilders on large suburban sites.
The number of complete homes remains a small share of overall BTR. This means that the year on year increase in completed homes is relatively high, at 27% in London and 44% outside of the capital. There are, meanwhile, a great deal more homes currently in planning. This means that any similar nominal increase gives a smaller proportional increase, with homes in planning increasing by just 8% in the past year.
As a part of this, the number of homes in planning outside of London has actually fallen marginally since Q1 2018. This could suggest that regional BTR has reached an equilibrium whereby the number of homes introduced to planning matches those entering construction phases.