0:06 AM, 5th May 2023, About 10 months ago 1
The number of build-to-rent (BTR) completions in the UK has slumped by 56% in a year – with the decline being blamed on the London market, research reveals.
Property developer Stripe Property Group has analysed the historic data on the annual BTR completions in London and elsewhere to better understand the emerging residential sector.
It says that in 2019, there were 13,788 BTR completions and despite the pandemic hitting in 2020, the sector proved surprisingly resilient.
That’s because 12,266 completions were recorded – and a year later the sector hit a high of 14,582 completions – split evenly between those inside and outside of London.
Last year, the BTR delivered just 6,473 national completions, a drop of 8,109 units or 56%.
James Forrester, Stripe’s managing director, says the drop in completions offers good and bad news for landlords in the private rented sector.
He said: “In recent years, excitement around build-to-rent has boomed.
“The completion spike we saw in 2021 was no doubt due to the tenant demand for better facilities, more onsite amenities and outdoor space having been confined to their homes for so long during pandemic lockdowns.
“Build-to-rent provides all of this, plus a higher standard of service and finish than your typical rented home.”
He continued: “However, recent economic conditions have led to higher materials costs, labour shortages and rising interest rates, all of which has contributed to the declining completion rates we’re now seeing.
“Build-to-rent as a concept is great news for cities, bringing young professionals back into urban centres to live and spend, but for private landlords, the sector is bad news, threatening to hoover up a significant proportion of tenants away from the private rental market.
“But the good news for landlords is that the rapid growth of build-to-rent has stalled, which means tenants are, for the foreseeable future, still going to be reliant on private rental stock and buy-to-let landlords.”
Stripe’s data shows the huge drop in numbers is being driven by London’s BTR sector since the capital accounted for 48.5% of all completions in 2021.
But in 2022, this fell to 43.1%.
The figures also show that the declining number of BTR completions goes against current trends in the new-build sector.
The firm says that in the past year, overall new-build completions in England increased from 142,140 in 2021, and to 144,350 in 2022.
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