Majority of UK's build-to-rent homes now outside capital

Majority of UK's build-to-rent homes now outside capital (iStock)

The build-to-rent sector was once a very London-centric industry, with an obvious focus on meeting the need for rental accomodation in a crowded city with high property prices through the building of large new developments. 

However, the situation has been changing significantly in the last few years, with a number of other major cities seeing the rise of build-to-rent. Manchester and its neighbour Salford have been a key centre for many projects, with the latter being home to the largest private rental scheme development outside the M25, at Clippers Quay. 

There have also been plenty more schemes in other cities and indeed in smaller towns, recognising the growth of this market and the need for it all over the country.  

As a result, London's dominance of the market has diminished, with the proportion of the overall tally in the capital gradually shrinking. Now, according to the British Property Federation (BPF), it has been overtaken by the regions.

Back in the second quarter of 2017, 55 per cent of build-to-rent homes that were either completed, under construction or in planning were in the capital. In the same period this year, the gap vanished. Indeed, by the slenderest margin of 62,021 to 62,015, the tally of build-to-rent homes was greater outside London. 

However marginal the figure, it represents a first and a pivotal moment for the UK property sector. 

Commenting on the development, BPF director of real estate policy Ian Fletcher said: "This is a significant landmark moment for build-to-rent, with the sector’s total number of homes across the UK’s regions overtaking London’s total for the first time ever. 

"Clearly, recognition of build-to-rent’s potential to deliver much-needed new, high-quality rental homes is gathering momentum across the country."

Notably, the figure did not come about as a result of any fall in London output, which was up from 54,702 a year earlier. 

The overall number of build-to-rent properties is likely to continue rising, said Mr Fletcher, pointing to a recent review by former government minister Sir Oliver Letwin showing that build-to-rent is capable of delivering homes on a large scale faster than building for sale. 

That is the kind of factor that will influence decision makers keen to see the number of homes of all kinds being built in greater numbers, with overall targets now pushed towards 250,000 a year, with future plans to reach 300,000 per annum in the next decade. 

Notably, the BPF recently surveyed MPs and found 75 per cent of them back the build-to-rent sector's role in expanding housing provision. 

With such momentum, the investment potential of this sector is set to carry on growing all over Britain. But for those wanting to focus on London, the good news is that the sector still expanding in the capital as well. 

This should reassure investors that, despite all the warnings about the potential impact of Brexit and the wider slowdown in the property market in the metropolitan area, this particular sector is continuing to boom. It may no longer be London-centric, but it is still very much on the up.