Build to Rent is now the dominant force in London’s new build sector
Research from Build to Rent specialists, Ascend Properties, shows that Build to Rent developments are beginning to dominate the new build sector throughout the UK, not least in London.
Build to Rent has, alongside the rest of the new build sector, endured difficult times during the COVID-19 pandemic with completions dropping slightly in the face of pandemic restrictions. In Q1 2021, throughout the UK there were 3,256 Build to Rent completions, representing a -10% drop when compared to Q1 2020.
In London, however, the past year has actually seen an increase in Built to Rent completions. In Q1 2020, there were 1,600 completions, while in Q1 2021, there were 1,809 completions, a rise of 13%.
And while the pandemic has brought with it severe complications, if we compare Build to Rent performance before COVID-19 arrived with its performance throughout the pandemic, London has demonstrated impressive resilience and optimism.
In the 5 quarters leading up to the start of the pandemic, London had 5,767 Build to Rent completions. In the 5 quarters since the pandemic started, there have been 7,371 Build to Rent completions, a remarkable rise of 28%. During the same time period, Build to Rent completions across the UK as a whole dropped by -11%, from 16,055 to 14,267.
If we compare the success of London Build to Rent during the pandemic with the success of the wider new-build sector during the same time period, the data suggests that Build to Rent is becoming the go-to choice for developers in the capital.
While London new build completions as a whole fell by -10% during the pandemic, the number of Build to Rent completions rose by almost 60%, showing that Build to Rent is an increasingly dominant force in the new build sector.
Managing Director of Ascend Properties, Ged McPartlin, commented:
“This data shows, without question, that Build to Rent is now the premier choice for London developers. While the pandemic has brought about a marginal decline in Build to Rent completions at a national level, the sector has gone from strength to strength within the capital and now accounts for a far greater proportion of all new build completions.
“This is hardly surprising as Build to Rent lends itself perfectly to the mixed-use development schemes that are fast becoming a key focus for London developers and local authorities, who are looking to revive demand in urban areas that have suffered since people stopped commuting into work.
“It’s often the case that unexpected global events turn long-term visions into immediate actions – this is the case with COVID and Build to Rent. Build to Rent was always destined to dominate the long-term vision of developers and residents alike, but the pandemic has now expedited that process of evolution.”
|Latest quarterly Build to Rent completions|
|Location||2020 – Q1||2020 – Q4||2021 – Q1||Quarterly Change||Annual Change|
|Data sourced from BPF.org.uk|
Note: The below data on pandemic Build to Rent completions (table 1) includes the latest sector data for Q1, 2021 (above). Therefore the pandemic timeline includes five quarters of completion data and (Q1, 2020 to Q1 2021), and compares to the previous five quarters (Q4, 2018 to Q4, 2019).
Table 2 shows how these completions compare to new build transactions, however, as the latest available data for new build transactions is Q4, 2020, the timeline reflects this with a year on year look to give an accurate comparison. Q1, 2021 Build to Rent completions have not been included hence why the totals differ from that in table 1.
|Table 1 shows the change in Build to Rent completions since the pandemic compared to the same time period previous|
|Location||Before pandemic||Since pandemic||Difference||Difference %|
|Time Period||(2018 Q4 to 2019 Q4)||(2020 Q1 to 2021 Q1)|
|Table 2 shows the change in Build to Rent completions since the pandemic compared to the same time period previous|
|Sector||Before pandemic||Since pandemic||Difference||Difference %|
|London New Build Completions||21,280||19,110||-2,170||-10.2%|
|London Build to Rent Completions||3,528||5,562||2,034||57.7%|
|Time Period||(2019 Q1 to 2019 Q4)||(2020 Q1 to 2020 Q4)|