The number of build to rent homes has increased strongly in the UK at a time when demand for rental homes is rising but even more need to be constructed, according to the industry.
The latest figures from the British Property Federation show that in the past year the amount of build to rent units in with planning permission, under construction or completed in the UK has surged by over 200% to 67,000 units.
More are being built in the regions which have seen an increase of almost 400%, from 7,000 units in October 2015 to over 34,000 a year on. However, the BPF has stressed that although these figures are encouraging, the sector could be delivering far more homes.
This is particularly the case at the moment, the BPF points out, as investors, with a potential £50 billion to invest, look for stable income and investment sectors that will be relatively unaffected by any Brexit market turbulence.
To further boost activity the BPF has called on the Government to consider changes to the stamp duty surcharge of 3% on additional homes that was introduced in April and want the Chancellor Philip Hammond to use his forthcoming the Autumn Statement to do so.
In its Autumn Statement submission, the BPF has also urged the Chancellor to introduce clearer national planning policy for build to rent developments, and to allow flexibility on space standards by up to 10%.
‘The build to rent sector has been one of the good news stories of the housing market over the past few years and it is great to see quality rental homes now coming on to the market at scale,’ said Melanie Leech, chief executive of the British Property Federation.
‘The truth is the sector could be delivering so much more, however, if it can find the opportunities and maintain confidence to invest. The Brexit negotiation period provides a window of opportunity to channel even further investment into this form of housing supply,’ she pointed out.
‘The sector was kick started a few years ago with support from Government and further modest planning and stamp duty changes we believe could firmly send it into overdrive,’ she added.
Meanwhile, the latest Government figures show that there was a surprise slowdown in the construction industry in August, although statisticians played down any link between the dip and Brexit jitters.
The data from the Office for National Statistics (ONS) show construction output fell by 1.5% in August after increasing by 0.5% in July with the decrease driven by a 5.1% fall in infrastructure output.
‘Construction output has fallen back quite sharply in recent months and contracted by 1.5% in August. As the fall this month is led by infrastructure, it seems unlikely that post-referendum uncertainties are having an impact,’ said ONS senior statistician Kate Davies.
‘Monthly construction data can be quite erratic, so we would warn against trying to read too much into one set of figures,’ she added.
The data also show that output decreased by 1.3% in the three months to August from the previous quarter but year on year it was up 0.2%.