The UK's first independent report into the build-to-rent (BTR) sector has tracked huge growth in urban areas and city centres where it’s taking up the slack from traditional landlords.
Centre for Cities reports that the supply of new BTR homes jumped from less than 1,000 in 2004 to almost 90,000 in large cities last year - 14% of new homes - demonstrating the increasing contribution it’s making to tackling housing shortages.
The think-tank’s analysis shows that London accounts for the largest share of BTR stock at 44% of the national total, followed by Manchester at 17% and Birmingham at 8%, which has been building at more than twice the UK average rate since 2019.
Outside London, more than half of BTR stock is concentrated in city centres and adjacent neighbourhoods, although Centre for Cities suggests there could be a role for BTR outside the city centre where it can provide rental accommodation on sites within commuting distance, as it does in the capital.
It believes to use BTR more effectively, national policymakers should amend minimum space standards, as data suggests that demand, for smaller, cheaper studios is stymied by current regulations.
Local policymakers should also encourage the development of BTR units around transport hubs in the suburbs of large cities, and carefully manage competing residential and commercial uses of space in city centres so that the former doesn’t crowd out the latter
Richard Donnell (pictured), executive director at Zoopla, says the private rental market desperately needs more supply - and the one market that has been delivering is build-to-rent.
“This growth spurt in supply from 2016 matches the point when private landlords slowed new investment and started exiting the market in the face of tax changes,” adds Donnell.
“The institutional and corporate money will keep flowing, attracted by rents tracking earnings over the long run. I also believe that the private BTL landlord consolidation is almost at an end.”
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