Since the introduction of Build to Rent (BTR) in the UK, the sector has grown rapidly in its early years. This growth is largely due to the BTR approach to tenancy, and its structure. Also assisting this, is the Government’s endorsements and investments for big players in the private rental sector. During the last five years, the BTR sector has experienced rapid expansion in the UK. New developments are being completed, constructed and planned in various cities in the UK.
Initially, this was not the case, with most Build to Rent developers focusing mostly on London. The next five years holds promise for other cities, with various investors eager to expand their reach around the country.
The following cities are where Build to Rent is set to boom in the future:
London
London remains the city with the highest number of Build to Rent units. The city accounts for more than 70% of the total number of BTR units available in the UK today. Despite this large quantity of units, there are still plans for more construction of Build to Rent units in London.
Currently, the number of Build to Rent units in London stands at 74,892, in various locations. The companies investing in the sector include London & Quadrant, a big investor in the sector. It has about 2,000 completed BTR units, mostly in the South East of London. Sigma Capital, another big player in the sector, has developments in both Barking Town Centre and Havering.
Criterion Capital, a private property company, also has BTR developments in Norbury and Wimbledon. Criterion Capital has 5,000 BTR units planned for London over the next five years. Grey Star’s goal is to have 10,000 BTR units completed in London by 2022. This includes 4,500 units set to be operational in four towers in the West, East, and South of London.
Get Living have 1,000 BTR units currently under construction in London. Its goal is to reach 3,000 units in the East Village and Elephant & Castle areas of London. Lastly, Quintain’s Wembley Park is set to be completed, with 3,000 BTR units built. A further 2,000 units are in various stages of planning and construction.
Manchester
Manchester has one of the biggest and fastest-growing economies in the UK – second only to London. In the expansion of BTR to other cities, Manchester is the second biggest in terms of investment in this sector. According to a report by the British Property Federation and Savills, Manchester has over 5,500 BTR units set to be operational. The boom in BTR development has arrived in Manchester, with an estimated 22,980 units completed or in the development pipeline.
This is apparent in the investment plans submitted by various investor companies. Currently, Moda Living and Apache Capital have completed the 35-storey Angels Garden building and are set to build more in Manchester in the coming years. In the works, Firea Real Estate and Packaged Living have a 352-unit BTR development set to be operational soon. Also, Dandara Living have 995 BTR units set to be operational in Chapel Street, Salford, Manchester in the next five years.
Leeds
A boom in its housing sector is a natural result of a city’s stronger economic growth. Leeds city has shown continued economic growth, leading to an influx of investors interested in supporting the city’s housing through BTR schemes.
Currently, the city has its first Build to Rent development at a capacity of 744 units, an investment from Dandara Living. BTR schemes from other investors are already under construction. Grainger is building a 242-unit BTR development at the Yorkshire Post site, and Legal & General are constructing a three-building BTR scheme at Mustard Wharf, with 247 units. According to BTR News UK, Galliford Try’s investments’ arm and the UK development arm of Chinese-based CIMC have submitted plans for a BTR development at Flax Place in Leeds. A new development to the east of Leeds is also planned. The plan covers the construction of two 11- and 15-storey Build to Rent towers, each with a 350-unit capacity. In general, an estimated 5,780 BTR units are in the Leeds development pipeline and will be operational in a few years.
Birmingham
Birmingham is one of the cities to join the movement to Build to Rent later than other locations in the UK. Despite its strong economy, Birmingham lagged behind in BTR investment, largely due to the city’s council policy. However, with former restrictions lifted, investors are making plans for Build to Rent expansion in Birmingham.
Moda Living and Apache Capital have a 720-unit BTR development under construction. Plans are being submitted for approval for a second 480-unit BTR development in Birmingham. Also, Grainger is set to build a 350-unit BTR development at Exchange Square in the city.
According to a report by the British Property Federation and Savills, the figures for the planned BTR developments in Birmingham have almost doubled from 4,800 units in 2018 to 8,000 units in 2019.
Glasgow
Glasgow is also one of the major cities in the UK experiencing a boom in its Build to Rent sector. As yet there are no operational Build to Rent developments in the city. However, there are huge investments in the sector set to cause rapid growth of development in the city.
Currently, Legal & General has a 321-unit BTR development underway in Buchanan Wharf, Glasgow. Also, there is planning approval for over 3,000 BTR units, from various investors such as Get Living, Moda Living, Apache Capital, and Rettie. In the next five years, Glasgow is set to be among the major BTR cities in the UK.
Conclusion
In the UK, renting has become more popular, especially among the younger generation, due to the scarcity of homes and high costs. More young professionals prefer the flexibility and convenience of moving between cities, which is what Build to Rent tenancy provides.
As the COVID pandemic pushes people away from London, these cities are places to watch in the BTR industry over the next five years.
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