The build-to-rent sector grew by 20% year-on-year to 148,000 homes in Q3, research from the British Property Federation (BPF) has revealed.
This includes all build-to-rent homes completed, under construction or in planning across the UK.
The number of units in planning has increased by 23% alone to 77,446.
The average size of build-to-rent developments is also growing.
In Q3 2019, the average size of each completed build-to-rent scheme was 133 units, this increases to 245 units for the schemes under construction, while the average size of schemes in the planning system is higher still at 325 units.
Geographically, growth of the sector is spread evenly between London and the regions, with both areas seeing total growth of 20%.
The number of build-to-rent units inside the capital and in the regions is also similar at 63,200 and 60,337 respectively.
However, in terms of units completed the regions saw the biggest increase, with a significant rise of 41% over the year to Q3 2019.
Ian Fletcher, director of real estate policy at the British Property Federation, said: “The build-to-rent sector continues to attract investment and deliver much needed homes.
“Not only do we have an impressive 31% growth in completions between Q3 2018 and Q3 2019, but the pipeline of new projects is also strengthening.
“Right across the country we are seeing growth in the sector, allowing people to access high quality, institutionally-managed rental properties.
“With both Labour and the Conservatives prioritising house building during their recent party conferences, our data shows build-to-rent is making an important contribution to housing delivery and often on difficult to develop and large urban sites.”
Jacqui Daly, director of Savills Residential Research who conducted the research for the BPF, added: “As individual households increasingly cannot afford to access the housing market, particularly once help to buy is withdrawn, so demand for the quality rented homes the sector provides will rise.
“Built-to-rent already makes a significant contribution to housing delivery, and we project this will increase to one in five new homes as more and more people rely on renting.
“This will change the housebuilder model, with bulk sales to investors growing their share of housing delivery.
“In our opinion, in 10 years, the customer lists of housebuilders will see pension funds and life insurers alongside first-time buyers and second steppers.
“Rather than shouldering the full burden of risk, housebuilders will act as master contractors, forging long-term partnerships with landowners and investors.”
By Ryan Fowler
Source: Mortgage Introducer