One area of the new
housing market which seems untroubled by Brexit is build to rent (BTR). The
sector is continuing to gain momentum with more schemes in the regions creating
a growing number of build to rent construction opportunities for contractors.
Recent research from
Savills underlines the strength of the sector. It shows the total number of new
BTR units completed, under construction or in a long term planning pipeline in
the UK stood at 139,500 as at the fourth quarter of 2018. This was up 22% on a
year earlier.
With many younger
householders opting to rent rather than buy, the sector is continuing attract
heavy institutional investment. Big regional cities such as Manchester,
Birmingham and Leeds are seeing significant increases in build to let activity.
Today, there are more BTR units under construction in the regions (around
24,000 in the first quarter of 2019) than in London.
BTR projects are
becoming larger; whilst the average size of schemes already completed in the
sector is 133 units, the average development now under construction has 240
units. Most schemes in the sector involve over 100 units and large players in
the sector such as Get Living and Criterion Capital are working on BTR schemes
typically with over 700 units. Savills identifies 12 landlords with pipelines
of over 2,000 BTR units, whilst the largest - Quintain, L&Q, Sigma Capital
and Get Living - each have pipelines of over 4,000 units.
The growth potential
for BTR in the regions was highlighted by plans unveiled earlier this month by
L & Q, a housing association often described as London’s largest landlord.
It plans to invest some £4 billion to build 20,000 new homes in the North West
over the next decade, through the acquisition of Trafford Housing Trust.
But BTR activity
will also remain significant in the capital. The quoted rental landlord
Grainger plc was chosen by Transport for London earlier this month as its
preferred bidder for a partnership which involve the construction of 3,000 new
homes across eight seed sites in London. Around 40% of these will be affordable
homes and the rest mainly for private rental.
Glenigan
Construction market analysis highlights the scale of build to rent development
schemes in the pipeline. At Liverpool Waters, construction work has started in
recent weeks on a £21 million BTR development for Peel Ports involving 105
flats and where work is set to continue for 20 months (Glenigan Project ID:
17011988).
Meanwhile, in Swiss
Cottage, north London, plans by Essential Living have recently been approved on
appeal for a £85 million BTR scheme involving 184 flats and a community centre
and retail units. Bills have been called and work is set to start this summer
and continue for 30 months (Glenigan Project ID: 14110829).
Build to rent is
also being combined with other forms of tenure on new developments. At Hyde in
Greater Manchester, tenders have recently been returned on a £17.5 million
scheme for Onward Homes involving 86 new build homes for rent and sale
alongside around 90 sheltered units. Construction is set to start this summer
and continue for 24 months (Glenigan Project ID:19112234.)
