BTR completions fell 11% in the year to Q3 2024
The number of build-to-rent homes in London have fallen by 11% between the third quarter of 2023 and that of 2024, dropping from 17,441 to 15,526.
The latest ‘Who Lives in Build-to-Rent?’ report from BusinessLDN, the British Property Federation, PriceHubble and the Association for Rental Living, found that home completions rose 13% to 51,516 over the same period.
The number of homes at the planning stage remained stable, rising 1% to 33,756 homes. The total BTR sector pipeline grew by just 5% in London over the year.
The number of build-to-rent homes in London have fallen by 11% between the third quarter of 2023 and that of 2024, dropping from 17,441 to 15,526.
The latest ‘Who Lives in Build-to-Rent?’ report from BusinessLDN, the British Property Federation, PriceHubble and the Association for Rental Living, found that home completions rose 13% to 51,516 over the same period.
The number of homes at the planning stage remained stable, rising 1% to 33,756 homes. The total BTR sector pipeline grew by just 5% in London over the year.
The report said the figures come amid a backdrop of high borrowing and delivery costs, construction skills shortages and insufficient capacity within local authority planning teams. Last summer also saw the multiple dwellings relief, a stamp duty incentive for investors acquiring several homes at once, come to an end.
A wider lack of supply of homes across London is seeing the capital’s boroughs spending £4m daily on temporary accommodation.
BTR demographic trends
As part of the new report, PriceHubble aggregated and benchmarked demographic data provided by nine BTR providers, covering 32 schemes and totalling 11,404 homes across London against comparable data from the wider private rented sector to understand whether renters choosing BTR differ from the wider rental population.
Its findings show that the age demographics of BTR occupants track the wider rental market very closely. People in the 25 to 34-year-old age range are the most likely occupiers in both BTR where they make up 50% of residents and the wider PRS where they make up 48%, followed by 16 to 24-year-olds, at 29% and 25% for BTR and PRS respectively and 35 to 44-year-olds at 14% and 17%.
In terms of income brackets, BTR mirrors the wider PRS for renters earning £26,000-£49,999, 38% and 45% respectively. For both, this is the dominant income bracket although BTR has a higher percentage of renters earning £62,000 or more, 39% versus 27%.
By employment sector, of those who work in finance and professional services 26% choose BTR and 27% opt for PRS, while those in the tech sector make up 16% and 10%, with the public sector coming in at 13% in both.
BTR is especially popular among students, with this cohort representing 31% of renters in the BTR sector, compared with 9% in the wider PRS.
Stephanie Pollitt, programme director for housing at BusinessLDN, said: “BTR has an important role to play in tackling London’s housing crisis, so the sharp drop in homes under construction over the past year should be a cause for concern for all levels of government.
“The current spending review is an opportunity to ensure the government is enabling housing developments of all types, including through a more ambitious Affordable Homes Programme. Policymakers should also work together with the BTR sector to mitigate spiralling delivery costs, ensure the right investment incentives are in place and accelerate delivery of much-vaunted planning reforms.”
Theo Plowman, assistant director, British Property Foundation, said: “This report reinforces the growing evidence that BTR plays a crucial role in supporting the private rented sector, particularly in London. BTR is essential for middle-income households, offering safe, high-quality and secure accommodation. It is therefore deeply concerning to see a decline in construction starts.”
