Despite the COVID-19 pandemic creating delays in building and construction, the build-to-rent sector grew significantly in 2020. The number of completed build-to-rent homes grew by 23%, from 43,598 in Q4 2019 to 53,750 in Q4 2020. Additionally, 22% more projects were in the planning process, and 5% were under construction.
Even throughout Covid-19, the Build-to-Rent sector has displayed resilience. It’s becoming an essential part of the U.K.’s delivery of new homes. Research published recently by the British Property Federation (BPF) When looking at government EPC data on total quarterly housing completions for England and Wales, build-to-rent delivered 4% of all new homes, and around a fifth of all new homes in London, in the final quarter of 2020. Additionally, build-to-rent is delivering more high-quality housing to the rental market.
The Build-to-Rent key areas:
In the UK, London is home to the highest number of Build-to-Rent developments. In Q4 2020, the number of finished homes in this sector rose by 26% compared to the same quarter the year before. Every region of the U.K. also registered positive growth in future Build-to-Rent supply.
The North West of England has the highest number of Build-to-Rent homes outside of the capital. In that region, there are 32,395 homes finished, under construction, or in planning. During Q4 2020, the North West also saw the largest annual gain in the number of completed Build-to-Rent homes, with a 31% rise in Q4 2019.
Hence, we can say that the number of homes being built as rental homes is booming at an unprecedented rate owing to few key reasons, including:
Millennials and Generation Z are two demographic sections that have traditionally been renting where they live. However, as they grow older, they dream about having families and moving to the suburbs or better-value smaller towns. They want a place to live that they can call their own. But, huge levels of student debt coupled with high housing prices put home ownership out of reach for many of these people. So, rather than buying a home, the next best thing is to rent a home instead.
More Streamlined Experience
Build-to-rent homes being offered by acclaimed real-estate companies like PPP Capital, boasts five-star service standards which complement the hectic lifestyles of millennial professionals and students. Residents are typically offered longer tenancies than for standard rental accommodation, with contracts of up to three years or more, and other amenities on-site such as gyms, communal lounges, and cinema rooms.
As the Build-to-Rent sector expands, the types of homes built and the different kind of people living in them are diversifying. The growth of Build-to-Rent is encouraging developers to branch out with developments catering for different types of individuals, who are at different stages of life. Build to rent developments can encompass a range of rental levels, including affordable housing, depending on, among other things, market conditions and the operating model of the developer
Build to rent has withstood the pandemic tenaciously. With rent collection and occupancy soaring, and economic trends looking supportive, we believe the sector has many compelling features which will help it in garnering more attention and visibility in the real-estate market.