Findings from a Build to Rent (BTR) specialist have revealed how the sector is poised to gain further momentum due to the number of units currently under construction.
According to Ascend Properties, the latest data shows that across the UK, 36,054 BTR units are currently in the pipeline, a drop of 1.8% year-on-year.
Previous research by the company showed that where pandemic completions across the BTR sector were concerned, London had seen a 28% uplift, while elsewhere across the UK completions were down by a third (33%).
But, when analysing sector data on the number of BTR units currently under construction, the opposite is true, with London experiencing a bigger decline.
In the capital, there are 16,227 BTR units currently under construction, a year-on-year fall of 8.2%. By contrast, elsewhere across the UK, the number of BTR units currently in the process of delivery has risen by 4.1% in 2021 when compared to the previous year.
The firm also examined the BTR pipeline in terms of the sheer value of bricks and mortar it will be bringing to the market once complete.
Overall, the 36,054 UK-wide BTR units currently under construction are estimated to add £10.9 billion in value to the BTR market. With new-build property values higher in London, Ascend estimates those units currently under construction to add an extra £8.1 billion in market value.
Although higher than the rest of the UK, this does equate to a 7.5% decline in the total value of the capital’s BTR pipeline on a year-by-year basis.
On the other hand, the BTR pipeline across the rest of the UK is estimated to be worth £5.7 billion – which, while it trails London, is an impressive 9% uplift on an annual basis.
“The strength of the BTR sector goes beyond the number of units being delivered to market and so it’s important that we also consider those currently under construction as an indicator of future sector performance,” Ged McPartlin, managing director of Ascend Properties, said.
“In this respect, the strength of the sector is pretty evident as despite the uncertainty posed by the pandemic, BTR construction is down less than 2% in 2021 when compared to the same time last year just as Covid was taking hold.”
He said that, while London is leading the way in terms of pandemic completions and the overall potential value of the BTR pipeline, the rest of the UK is ‘steaming ahead’ in terms of an increase in the number of units under construction and their year-on-year value growth.
“So there are positive signs across the board that the BTR sector continues to build momentum and it’s also important to note that this is based on the Q1 pipeline only, with these figures only likely to grow as the year progresses,” McPartlin added.