UK: New analysis from the British Property Federation (BPF) shows that construction in the BTR sector slowed during Q1 2024 due to significant planning delays.
The research, conducted in partnership with Savills, found the number of BTR homes under construction fell by six per cent from Q1 2023. The figure is down 33 per cent on the pre-covid average from 2017/2019.
Build cost inflation and significant planning delays have been cited as the main reasons for the slowdown. According to the BPF, 40 per cent of BTR sites take at least a year to achieve planning consent.
Between Q1 2023 and Q1 2024, the total number of BTR homes in planning dropped one per cent to 108,900. Despite this, 59,000 units have detailed planning permission — the highest number on record.
There is greater appetite for BTR, with 22 additional local authorities now having these properties in their planning pipelines
Overall, the sector has grown; in the 12 months to Q1 2024, the total BTR pipeline — including completed homes, ongoing construction, or those awaiting some form of planning — grew by four per cent.
The total BTR pipeline stands at more than 265,000.
“The number of BTR homes receiving detailed planning permission is the highest on record, which is testament to the strength of the product, investor appetite, and consumer demand for homes for rent,” said Ian Fletcher, director of policy at the BPF. “While it is encouraging that the sector continues to grow, the sector has faced a challenging 18 months. The sector needs to grow so it can service huge rental demand, but policy decisions, such as the shock Budget announcement to abolish multiple dwellings relief, hinder rather than help the sector.”
