The UK’s build-to-rent market is booming outside of the capital. Despite the current economic uncertainty, there have been huge surges with new property investment opportunities in the West Midlands, Yorkshire, and the East Midlands. North Property Invest takes a look into the property investment opportunities outside of London.
New data from the British Property Federation (BPF) shows that this trend is set to continue. Compared to the same time last year, there are now 4,000 fewer build-to-rent properties in planning in London, whereas there are 12,600 more in the UK regions.
The West Midlands saw the largest increase in new build-to-rent homes at 4,700 more. Yorkshire has 2,400 more in planning, while the East Midlands has undergone an increase of 2,131 – more than was in the region’s entire development lifecycle last year.
The uncertainty caused by the coronavirus isn’t likely to have much of an impact on the build-to-rent market. The huge imbalance in supply and demand is expected to remain after the country returns to normality.
Ian Fletcher, BPF’s real estate policy director, said: “Pain is being felt across all sectors of the economy, but build-to-rent remains attractive to investors and we know from past experience that demand for rental housing usually leads homes-for-sale out of any recovery.”
With a strong pipeline of build-to-rent homes in planning throughout the UK’s regions, these parts of the country should see yet another rise in numbers over the coming years.
Areas outside of London also beat the capital for number of completions of build-to-rent properties. With a 58% increase resulting in a total of 22,446 completions in Q1 2020, the UK’s regions surpassed the London figures of 20,770.
The number of completions in both Yorkshire and the West Midlands doubled during Q1. The North West underwent the largest actual increase, from 3,875 to 11,161 build-to-rent home completions.
The build-to-rent sector should emerge from the current situation relatively unscathed. These condition may actually increase tenant demand for rental properties, thereby mounting the pressure on build-to-rent developers.
Savills residential research director Jacqui Daly expects that, “Once lockdown is lifted, build-to-rent developers should be confident to progress stalled developments.
“Also, housebuilders will face particular pressure to restore their sales rates when restrictions on doing business are lifted so we could see a greater role for build-to-rent to absorb stock.”
Major build-to-rent developers Moda Living are also confident in the long-term success of the sector. Their managing director, Johnny Caddick, expects things to slow down, but doesn’t foresee any problems delivering a growing number of projects over future years.
He says, “The reason we established Moda in the first place was because of the huge supply and demand imbalance in the market for residential rental stock, and that hasn’t gone away even as a result of Covid-19.”