Build to Rent (BTR) remains a fast-growing sector with thousands of developments currently under construction, and this trend looks set to continue in 2024 and beyond.
According to fresh analysis by Foxtons, BTR homes now account for almost 2% of all privately rented properties, climbing to 4.2% in London – the largest proportion of market share seen since 2018.
Foxtons analysed annual BTR completions (total market stock) since 2018, looking at what proportion of total PRS stock the sector accounts for and how this market share has grown over time.
The research shows that in 2018, BTR completions totalled 31,409, accounting for just 0.6% of the 5.5m privately rented homes within the lettings sector.
The BTR sector has grown consistently annually since and in 2020 the number of BTR units found within the rental market sat at 58,844. At 1.1%, this was the first year the sector accounted for more than 1% of the total private rental market.
This number has since climbed to 100,372 in 2023, meaning that the number of BTR units available to private tenants has increased by 69% since 2013.
In contrast, total PRS stock has increased by 3% during the same period and today, the BTR sector is estimated to account for 1.8% of total private rental market stock – The highest proportion seen since 2018.
In 2018, BTR completions accounted for just 1.8% of the capital’s total PRS stock. As with the wider UK picture, BTR completions and market share have increased consistently every year.
Today, Foxtons analysis shows that BTR homes account for a notable 4.2% of the capital’s PRS stock, with Build to Rent completions having increased by 61% since 2018 alone.
The managing director of Foxtons Institutional PRS and Build to Rent, Sarah Tonkinson, commented: “We’ve seen phenomenal growth across the Build to Rent sector in recent years, particularly within the London market and, as a result, Build to Rent completions now account for their highest proportion of total PRS stock.
“However, it’s fair to say that the sector still remains in its relative infancy and so the potential for further growth is vast.
“With a move towards longer term renting until later in life, tenants expect more both with respect to the quality of rental accommodation available, and the security and certainty that long tenancy agreements provide them.
“With the Build to Rent sector offering this, and more, we only anticipate demand to increase and for stock levels to follow suit in order to satisfy the evolving needs of renters.”
