Autumn Statement 2023 | Build to rent 7
The British Property Federation reported that there were 42,000 Build to
Rent units in London by the end of Q2 2023, which will more than double
when the units under construction and those in the pipeline are included.
We have seen a gradual change in
renter behaviour. The average age of
Build to Rent residents is decreasing,
although this may be explained by
the influx of students in BTR blocks
from 2021. We find that they are
planning to stay longer and wanting
to fix their costs long-term. We are
also seeing renters moving within
developments as they find a
community that suits their lifestyle.
In some parts of London, including
Ealing, Newham and Southwark, the
percentage moving locally, most
likely within the same development,
is over 10% as residents become part
of communities and appreciate the
value this brings.
Value for money
The additional amenity and service
provision, energy efficiency and security
offered by the sector remain appealing to
renters looking for value for money as other
costs continue to rise. We showed, in the
London Report 2023, the relative costs of
running properties at different EPC ratings
and highlighted the savings associated with
buying or renting newly built properties.
In a similar vein, the vast majority of BTR
properties are highly energy efficient
(78% of properties let in 2023 in London
achieved a rating of B), benefiting from
lower running costs than some older rental
properties. In addition, as the BTR sector
evolves, so will its product offering. Mindful
that not all renters require, or have the means
to afford, a wide range of amenities, the
sector is developing different products,
including co-living and lower amenity options.
LONDON BUILD TO RENT
CONTINUES TO DELIVER
RENTER BEHAVIOUR
2019 TO 2023
BUILD TO RENT
Renters are now actively seeking Build to Rent (BTR) developments and
have demonstrated an increasing openness to considering new locations in
their pursuit of the perfect development. As each BTR development is
different, people will move to find the right blend of amenities, finish and
community. We are seeing, for example, that those looking in Shoreditch
are moving that bit further to properties in Stratford and Harrow.
Dataloft, showing new renters beginning tenancies in BTR developments in January to August of each year
% moving within the same development is implied from renters moving into BTR from less than 100 metres
British Property Federation
OVER TWO-FIFTHS
OF BTR RENTERS
FIRST
REGISTERED
IN ANOTHER
FOXTONS
OFFICE
Renters open to
choosing BTR Foxtons
44%UP FROM 37% IN 2019
YOUNGER
RENTERS
UNDER 30
2019
22,077 28,587 36,309 42,033
91,603
40,198 58,010
2021 Q2 2023
+ PLANNING
PIPELINE
2020 2022
+ UNITS UNDER
CONSTRUCTION
OVERSEAS
RENTERS
MOVING
WITHIN BTR
DEVELOPMENT
PLAN TO STAY
LONGER
MONTHS
MONTHS
STUDENTS INCOME
SPEND
STABILITY
50.4%
2019
8.7%
2019
6.0%
2019
8.5%
2019
29.8%
2019
12.2
2019
61.5%
2023
7.8%
2023
8.3%
2023
11.8%
2023
14.2
2023
Total BTR units
29.6%
2023
% of PRS 2.2% 2.8% 3.5% 3.9% 4.1% 5.7% 8.9%