0:06 AM, 19th January 2024, About 11 months ago 6
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Up to 1 million more homes for rent will be needed by 2030 to cater to the increasing rental demand, especially from young families – and the build to rent (BTR) sector will be crucial for this, a new report reveals.
The findings from Savills on the future of BTR in England and Wales identify several factors that are driving the demand for these homes.
These include the limited supply of private rented sector (PRS) properties, the worsening affordability of home ownership, the end of the Help to Buy scheme and the changing cultural attitudes towards renting for longer.
Savills’ director of residential investment research and consultancy, Dr Jacqui Daly, said: “With almost half of build to rent occupiers aged between 26-35, the market is popular with young, middle-income couples and families, with people moving further afield to access these homes.
“According to our research, these developments tend to have good occupancy with most residents renewing their lease year on year.
“This is likely to be attributable to the strong levels of satisfaction for those living in these schemes.”
The report, Future of Build to Rent Houses was sponsored by 17 companies active in the industry, also explores the potential of the single-family housing market, which consists of newly built homes on low rise developments that have good access to schools and transport links.
Savills says this market has already attracted more than £3.5 billion of investment, despite being a relatively new sector, and it expects that this figure will increase in the future.
However, the report also highlights some challenges that the sector faces, such as the lack of understanding of the market from key decision makers.
Ms Daly said: “Following a series of stakeholder workshops, we found that ‘single family housing’ is a term that is misunderstood by many local authorities.
“We believe that by simplifying the terminology and jargon used in the sector, planning committees will fully appreciate that this is a proposition that will help drive delivery.
“Build to rent is the preferred term because it is defined in national planning policy guidance.”
The report also reveals that large housebuilders are currently the main providers of build to rent homes, but their delivery is only 0.5% of new housing completions.
Savills suggests that housebuilders are eager to form partnerships with investors on sites where they can deliver at the speed of construction rather than sale.
Also, local authorities are increasingly recognising that the sector is adding quality homes to the PRS and that more supply is needed to meet the Government’s housing targets.
As a result, the number of local authorities with single family build to rent homes in their development pipelines has risen to over 30%, more than doubling in the past five years.
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Zen
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Sign Up10:17 AM, 19th January 2024, About 11 months ago
These maybe "Savils findings" but it's really not very realistic. I wonder how they came up with this number?
One million new built to rent homes by 2030, that's in only 6 years. But if only 0.5% of new homes built are build to rent then this percentage needs to massively increase. At a rate of 0.5% in 6 years to build one million then 33.33 million new homes would need to be built a year. Not realistic!!! Developer's can't even build the governments current targets of 300,000 a year.
To build one million by 2030 that's 166,000 build to rent homes a year that's more than 50% of the governments current target. I just can't see it.
166,000 homes a year at a new built cost of £250,000 per property (absolute minimum) is an investment of £41,500,000,000. I'm not even sure what this big number is, is it 41billion? If I've got my number of zeros correct.
Where is this investment going to come from. If Savils are correct then by 2030 the UK will have a huge homeless population not including the fact that we're not even building enough now homes for first time buyers. Can you imagine the number of tents popping up.
Yes, this sector is adding quality homes to the PRS but this kind of number is pure fantasy.
Reluctant Landlord
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Sign Up11:16 AM, 19th January 2024, About 11 months ago
stats provided to Savills by the think tank -
'thinkofanumber.com'
Martin Roberts
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Sign Up11:47 AM, 19th January 2024, About 11 months ago
Even if these build to rent properties were built where are the landlords to come from when Government policy is to drive us out?
Old Mrs Landlord
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Sign Up12:39 PM, 19th January 2024, About 11 months ago
Reply to the comment left by Martin Roberts at 19/01/2024 - 11:47Presumably they would be financed and rented out by the government's buddies, the big build-to-rent companies, where more than likely former politicians will find lucrative positions on the board. It seems to be a well established "You scratch my back...." tradition.
NewYorkie
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Sign Up14:45 PM, 19th January 2024, About 11 months ago
Reply to the comment left by Martin Roberts at 19/01/2024 - 11:47This is not for your typical BTL landlord. The investment is coming from institutions and those who see the opportunity as investing in 'BTL without ownership and hassle'. It is simply another investment asset class which will deliver income through dividends and share price increase. Capital appreciation and rent rises should drive up the attractiveness of the asset, and increase the share price.
I've had enough of BTL but do believe there is a big future in renting. There is a growing demographic who want to rent rather than buy, but they want modern, high-quality, energy-efficient, city centre homes for the long term. However, the government of whatever colour, and councils, will continue to make life difficult for the BTL landlord, further diminishing the stock in the PRS.
The ground was being prepared for BTR by Osborne with S24.
I sold my home in November, and have a lot of cash. I am refurbishing and extending my new home, but will still have a lot left over. I will never again invest in direct ownership BTL, so have taken a punt on BTR via the PRS REIT.
It may not be as 'fulfilling' as BTL, but I've retired and don't need the hassle.
Contango
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Sign Up10:24 AM, 26th January 2024, About 11 months ago
this is pure Americanese
a single family home means a house nothing below or above
a multi familu home means a block of flats
thats all