New analysis has revealed that 40 per cent of build-to-rent (BtR) sites take at least a year to achieve planning consent, representing a rise of seven per cent from a decade ago.
According to new analysis from the British Property Federation (BPF) planning times have become longer because of the application process.
Despite this challenge, the analysis highlighted the sector has reached a significant milestone, with the total number of BtR homes completed in the UK reaching 100,300 units, an uplift of 17 per cent nationally, year on year.
Ian Fletcher, director of policy, British Property Federation, comments: “The BtR market has grown significantly throughout the past decade.
“While reaching such a significant milestone (100,000 homes) for the sector is encouraging, we must ensure current challenges are temporary.
“Sentiment certainly is improving, and when interest rate cuts become real, rather than talked about, I would expect the sector to expand rapidly, given the strong pipeline of units that exist with planning permission.”
The number of BtR homes with detailed permission in Q4 2023 was 58,000, the highest number on record. This suggests a strong pipeline of future growth.
Starts, however, have deteriorated over recent quarters, reaching 12,500 units in Q4 2023, from a post-pandemic peak of 25,000 units in Q3 2022.
The sector continues to expand across the UK, as regions see a 23 per cent year-on-year increase on the number of BtR homes under construction, almost double that of London (12 per cent).
Mr Fletcher continues: “We lead an ambitious sector that delivers a great product. A target of 30,000 desperately needed rental homes a year is eminently doable, but it requires support.
“The research we are making available illustrates one of the structural challenges to the sector – time in planning is getting longer.
“While we cannot say for certain what part of the planning process is leading to increased times, it is crucial to recognise that the more drawn out the development process, the longer it takes to get to an investor’s goal – income.
“It does, therefore, matter a great deal and is a brake on the growth of the sector.”
