Exceptional growth in the build-to-rent (BTR) sector has pushed completions to a record high during the past 12 months.

Analysis by the British Property Federation (BPF) and Savills serve as a warning to private landlords that the BTR sector is pedalling hard to become a significant competitor with the traditional private rented sector accommodation.

The analysis found that build-to-rent is starting to make a real difference to housing delivery across the UK, with 22,000 homes completed. When homes under construction or those with planning approval are included, it has resulted in 4% year-on-year growth, with the regional market now leading London.

The total sector pipeline is close to 262,000 new homes, or just over the five-year average of total housing completions of all tenures across England of 210,000 dwellings per year, while the total number of completed units now stands at 115,778, reports the BPF.

Gap widening

However, for the third quarter in a row the number of completions has remained above the number of starts, with the gap between the two widening to 10,600 homes, up from 3,400 in the previous quarter. This is reflected in a 19% fall in the number of homes currently under construction compared with Q2 2023, reflecting ongoing build cost inflation and cost of debt along with economic and political uncertainty.

The number of local authorities with BTR in their pipeline has remained the same as the previous quarter, standing at 208, although the BPF expects this will increase in the second half of the year. It also believes the industry’s partnership with government should give investors long-term confidence in building new homes, with an annual target of 30,000 build-to-rent homes.

Director of policy Ian Fletcher (pictured) says more action is needed to convert planning consents to starts on site and to bring new schemes forward through the planning process. He adds: “We need continued growth to service huge rental demand and look forward to working with the new government to make that happen.”

Picture credit: Galliard Homes at Neptune Wharf.