Record number of build to rent homes hit the market

June 2021

It’s now been just over a year since building sites started to re-open and housebuilding got back underway. But the evidence since then points to there being few signs pandemic induced lifestyle changes have slowed down the longer-term growth of build to rent.

The backlog of new schemes completing meant there were 47% more build to rent homes advertised in the first five months of 2021 than during the same period in 2020. The figure has more than doubled in comparison to the same period in 2019, with the numbers up by 108%. This, coupled with high tenant attrition rates, means that just over 40% of homes marketed this year are being let for the first time.

In a typical month over 1,000 build to rent homes are now advertised across the country. This equates to around 1% of all the rental homes coming onto the market. Despite their city-centre locations, the facilities they offer have seen them weather multiple lockdowns well. The rents being achieved by build to rent homes have fallen far less than in other city-centre locations.

While London still accounts for just over half of build to rent homes, an increasing number of new schemes are outside the capital. In the first five months of this year, 45% of homes marketed were outside the capital, a record figure. 40% of these were in the North West, predominantly Manchester, and to a lesser extent Liverpool.

The number of new schemes in the pipeline, alongside insatiable tenant appetite, means growth in the immediate future is likely to continue on a similar trajectory. Although it will be set against a backdrop of a private rented sector that remains broadly stable in size. Beyond this, growth rates will be determined by its ability to attract tenants outside of its current core market, perhaps in more suburban locations. While the end of Help to Buy in 2023 may divert some new homes from built to sell into build to rent.