BTR Looks An Early Slowdown Winner, If Planning Confusion Doesn't Mess Things Up
Construction has begun at Birmingham-based property developer Cordia Blackswan’s latest build-to-rent development, The Lamp Works.
The 148-unit scheme at Great Hampton Street and Harford Street in the city’s Jewellery Quarter gets underway as new data shows regional BTR is growing at a rate that outpaces the national trend and could be a winner in a stagflationary economy.
New analysis from the British Property Federation shows a 22% year-on-year increase in the number of BTR homes in regional towns and cities.
The total number of BTR homes either in planning, under construction or completed in the UK was up 15% between Q3 2021 and Q3 2022, from 209,313 to 240,202.
Savills, which helped assemble the data, predicts the number of completed BTR homes could reach 380,000 in the next decade.
The BTR pipeline in the regions outside London has also increased by 8% quarter-on-quarter, jumping 22% on an annual basis, with a total of 77,282 homes now planned.
Though the analysis shows the sector continuing to grow, there are signs of a slowdown, at least in the short term. Starts in the first three quarters of 2022 were 10,493 and 14,410 at the same point in 2021. The authors blamed inflation.
There are also concerns a confused planning approach to BTR could slow development.
“The pipeline of BTR homes would benefit from a more standardised planning approach," British Property Federation Director of Policy Ian Fletcher said. "Very few local authorities have BTR policies in their local plan, and therefore the application process is often bespoke and takes a long-time. For a sector that is driven by income returns, a long time in planning can put paid to many a scheme."
