The latest annual report on Build To Rent in London again talks of issues with costs and delivery.
A report from the British Property Federation says: “Sharp increases in build and financing costs are stalling delivery in London.”
The analysis, conducted as usual in partnership with Savills, shows that the total number of BTR homes completed or in the pipeline across the UK rose to 263,694 at the end of Q3 2033, up 11 per cent year-on-year.
The number of completed homes increased by 11 per cent to 82,660 while the number of units under construction and in planning increased by 12 per cent to 52,852 and 10 per cent to 102,042 respectively.
In regional cities, which account for 60 per cent of all completed and pipeline BTR homes, activity remained “relatively robust”with the number of units under construction increasing by 16 per cent over the year to 40,231 and new starts in Q3 2023 totalling 3,339 units.
Meanwhile in London, increases in build and financing costs are having a severe impact on the delivery of larger, more capital-intensive schemes.
New starts in the Capital totalled just 434 units in Q3, and 266 units in Q2. Units under construction increased just five per cent year on year in Q3.
The report also highlights that 200 local authorities have now consented BTR developments or have schemes in the pipeline, up from 100 authorities five years ago.
The national planning pipeline remains robust, with 57,214 homes with detailed planning permission, and 25,792 homes at detailed application stage.
Ian Fletcher, Policy Director, British Property Federation, says: “The sector is facing significant headwinds in terms of delivery. Uncertainty on inflation and where interest rates will peak is causing projects to stall, particularly in London where developments are typically higher-density and more complex.
“However, there are nearly 60,000 homes with a detailed planning application in the sector suggesting market activity could pick up quickly when conditions are right, but policymakers must recognise more support may be required to sustain the growth of the sector in the short-term.”