Planning pipeline for single-family rental homes doubles

Increased demand and investor appetite for single-family rental schemes has seen the planning pipeline double over the past 12 months, according to the latest figures from Savills. The agent found that over the past year some 31 additional single-family rental schemes had become operational in the UK, delivering 2,000 new homes, with the planning pipeline doubling in size. There are now more than 15,000 single-family rental homes either under construction or in planning, says Savills. It estimates that with the current momentum and the weight of capital chasing the sector, there could be as many as 30,000 single-family rental homes in operation by 2027 and more than 70,000 by 2032. Over the next decade, Savills expects single-family rental to make up 18% of the wider build-to-rent market. It currently holds a 12% share of the market. “With the supply of homes for private rent shrinking and investor interest growing, single-family rental can play a key role in helping to meet housing needs, particularly those of young or growing families, and reduce the significant supply shortages in the rental market,” said Jacqui Daly, director of residential investment research at Savills. She added: “Owing to a significant influx of interest in the sector, single-family rental is coming forward in more than 100 local authorities across the UK and is anticipated to continue to rise. This geographical expansion has been supported by the improved viability of the South, combined with investors seeking geographically diverse schemes to have balanced portfolios. In particular, investors have recognised the great housing need in this region, with many concentrating strategies on markets with the greatest need for supply.” Savills’ analysis shows that 60% of single-family rental households have children, compared with 30% of households across the wider private rental sector, demonstrating its potential to play a key role in family housing provision nationally. It also reveals that the majority (66%) of single-family rental tenants are aged between 26 and 45 years old, and stay for three years or more. This is beneficial from an investor perspective, as it means reduced void levels, minimising loss of income. “As new investors enter the space, we are likely to see an evolution of the single-family rental model, with investors seeking larger schemes where economies of scale can be driven,” said Piers de Winton, head of national residential investment and single family at Savills. “In the past 12 months alone, the average site under construction has grown by a third and the average site in planning has grown by 52%. “It is also vital that single-family rental operations should continue to adapt to changing tenant needs. Changes such as allowing tenants to decorate their space have proven successful in increasing the length of tenancies and fostering a sense of community. As electric vehicles become more common, the provision of charging points will also continue to rise up tenants’ priority lists. At the same time, it can improve the overall quality and energy efficiency of housing stock, at rents that are affordable to middle-income households.” To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews Photo © Ketut Subiyanto/Pexels