Planning backlog squeezes BTR pipeline in Q1

Planning backlog squeezes BTR pipeline in Q1

Construction in the BTR sector slowed during the first quarter of this year due to “significant” planning delays, according to new analysis from the British Property Federation (BPF).

The research, conducted in partnership with Savills, found the number of BTR homes under construction dropped by 6% from Q1 2023.

The differential was even starker at -33% from the pre-covid average from 2017-2019.

Numerous challenges have been highlighted as causing this, including build cost inflation and significant planning delays.

According to the BPF, 40% of BTR sites take at least one year to achieve planning consent.

Between the first quarters of 2023 and 2024, the total number of BTR homes in planning fell by 1% to 108,900.

Despite this, 59,000 homes have detailed planning permission — the highest number on record.

There is greater appetite for BTR, with 22 additional local authorities now having these properties in their planning pipelines — bringing the total number to 208.

Overall, the sector has grown; in the 12 months to Q1 2024, the total BTR pipeline — including completed homes, ongoing construction, or those awaiting some form of planning — grew 4%.

The total BTR pipeline stands at over 265,000, with the regional market outgrowing London by 4% and 3%, respectively.

“The number of BTR homes receiving detailed planning permission is the highest on record, which is testament to the strength of the product, investor appetite, and consumer demand for homes for rent,” said Ian Fletcher, director of policy at the BPF.

“While it is encouraging that the sector continues to grow, the sector has faced a challenging 18 months.

“The sector needs to grow so it can service huge rental demand, but policy decisions, such as the shock Budget announcement to abolish multiple dwellings relief, hinder rather than help the sector.”

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