The total number of purpose-built rental homes granted planning consent has increased by 35 per cent over the past 12 months, according to analysis from the British Property Federation (BPF)
At the same time, Savills has revealed the continuing challenge of converting consents into construction output, with the number of new homes under construction contracting throughout 2024 and down 18 per cent since Q4 2023.
This drop in construction has been an ongoing trend in 2024, with the number of completions consistently outpacing the number of starts and mirroring the decline in starts on site of new homes across England as a whole.
This gap is continuing to widen, with 10,900 more homes completing in 2024 than starting.
The slowdown in construction is being seen more acutely in London, which has seen a 22 per cent contraction compared to 16 per cent in the regions.
Despite this slowdown in the construction of new build-to-rent (BtR) homes, there are encouraging signs that the pre-commencement pipeline is starting to be replenished, with a marked increase in the number of planning consents granted in Q4 2024.
This is most pronounced within London, which has seen the most BtR consents granted by English region at 7,523 homes, with 48 per cent of those granted in 2024 within Q4.
Outside of the capital, the West Midlands recorded highest number of new consents across 2024, mostly driven by Birmingham which saw almost 3,700 homes consented out of 4,038.
Ian Fletcher, director of policy, British Property Federation, says: “Despite the continuing decline in the number of starts on sites and overall completions of new BtR accommodation, there are some tentative green shoots that the planning pipeline is improving.
“This positions the BtR sector quite well for when the development market once again picks up and is potentially an early sign at investor and developer confidence is slowly starting to return, especially within London.
“In the context of challenging delivery figures for housing overall, BtR has an increasingly important role to play in rapidly converting consents to homes as it is not reliant upon future sales absorption.
“Investor appetite for BtR remains strong and that is certainly something which the government needs to carefully consider in the context of its forthcoming housing strategy.”
