International law firm DAC Beachcroft commissioned think tank, Centre for Cities, to examine the growth and geography of BtR developments and their role in future housing policy.
Gemma Leonard, Head of Development, comments: “BtR’s growth over the past two decades has been rapid, now accounting for 14 per cent of housing growth in the UK’s major cities over the past five years. Young professionals make up the majority of tenants, and their positive experience of professionally managed housing — along with the potential need to accommodate growing families — is likely to drive further growth in single-family BtR developments”.
These are some key findings of the report.
- “Build to Rent” (BtR) is focused in urban areas, especially large cities, which sets it apart from the rest of the housing market. Eighty-four per cent of BtR stock is located in large cities. The sector is predominantly multifamily in nature, with single-family housing making up only 3 per cent of BtR developments.
- BtR has grown quickly since the early years of the 21st century; even more so after 2017. London, Manchester and Sheffield saw some of the earliest development. London now accounts for 44 per cent of developments and Manchester is the second largest contributor of BtR housing additions. While Sheffield has seen very little recent development, Birmingham has been building at more than twice the UK average rate since 2019.
- BtR is now an important part of housebuilding in large cities, making up 14 per cent of new accommodation.
- BtR is concentrated in city centres and adjacent neighbourhoods in large cities outside of London. Its distribution in London is spread across the suburbs, with marked differences between boroughs.
- Demand is driven by young professionals, but minimum space standards may be preventing supply of BtR from meeting demand from this group.
- BtR is primarily financed by institutional funders and could be a more effective vehicle for driving greater domestic investment from pension funds.
