Build To Rent stalls - good news for buy to let agents and landlords?

The number of Build To Rent completions has fallen by 56 per cent in the past year, a decline being very much driven by the London market.

Property development firm Stripe analysed historic data on the number of annual UK BTR completions inside and outside of London to better understand the current state of the emerging residential sector.

In 2019, the UK recorded 13,788 BTR completions. As the pandemic hit in 2020, the sector proved surprisingly resilient by recording a further 12,266 despite the economic crisis created by the pandemic.

By 2021, the sector hit a high water mark for completions at 14,582, split evenly between completions inside and outside of London. But then, through 2022, the numbers dropped significantly to just 6,473 national completions. 

This significant annual decline is driven by London’s BTR sector. In 2021, the capital accounted for 48.5 per cent of all completions, but in 2022, this fell to 43.1 per cent.

The declining number of BTR completions goes against current trends in the wider new-build sector.

In the past year, overall new-build completions in England increased from 142,140 in 2021 to 144,350 in 2022.

Stripe director James Forrester says: “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. 

“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.

“ … 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.”