The Build to Rent (BTR) sector has performed strongly during the second quarter of 2019. In particular, there have been a high number of homes reaching completion and entering planning. By the end of Q2 2019, there were over 32,000 completed homes. This figure is 34% higher than that identified at the end of Q2 last year.

The number of homes in planning now exceeds 74,000, a 20% increase year on year. The units in planning represent the largest share of the sector and total more than those completed and under construction combined.

The total number of new BTR units completed, under construction, or in the longer term planning pipeline in the UK now stands at 143,000, a 17% increase on Q2 2018. At full maturity, we estimate the BTR sector could grow to 1.7m units so there remains considerable scope for growth.

As confidence has grown in the sector, institutional investors have become increasingly comfortable delivering BTR schemes at scale. The average size of a completed scheme is now 132 units, while the average scheme under construction is 241 units.

Investors are looking to accelerate delivery with the majority of schemes under construction or in planning set to deliver in excess of 100 units. Of investors with 5 or more schemes in planning or under construction, Get Living are bringing forward the largest schemes, averaging 790 units per scheme.

The second quarter of 2019 has seen three schemes entering their construction phases, totalling 518 units. Legal and General’s Chelmer Waterside development, at 104 units, is Chelmsford’s first BTR development. This shows that in addition to investing in core UK cities, institutions are recognising the potential of strong regional employment centres with good transport links.

This quarter has been even more active in terms of completions with 10 schemes completing, totalling 1,800 apartments. Only one of these schemes (Victory Pier, in Gillingham) was located outside of London or the North West, which remain the dominant markets for UK BTR. Together, these two regions hold 78% of completed BTR units to date.

Build-to-Rent is still very much an emerging sector in the UK with the number of complete homes maintaining a small share relative to overall BTR. The year on year increase in completed homes is therefore relatively high, at 29% in London and 40% outside of the capital. The number of homes in planning has grown 29% in London and 12% in the regions. This increase in London is substantial and represents the greatest year on year increase in the capital since Q4 2017.

The appointment of Grainger as TfL’s preferred Build to Rent partner is partially responsible for the increase. Limmo Peninsula, in Newham, is one scheme planned within the partnership that aims to deliver 1,500 Build to Rent homes.