Thursday 6 September 2018

Is building to rent a good idea?

The article below suggests that building dwellings to rent is a growth area.

Dwellings built specifically for private rent has been forecast as one of the key areas of growth within the housebuilding industry, according to AMA Research.

Analysis in the research firm’s Housebuilding Market Report – UK 2018-2022 notes that as well as attracting some of the larger housing associations, an increasing number of large private housebuildng groups are diversifying in the Build to Rent sector.

The focus, the research explains, is on investing in large-scale apartment developments in key parts of London, the West Midlands and the north west of England, which all offer economies of scale. This, AMA said, is being achieved through the increased specification of prefabricated building components and full offsite building systems, like modular construction.

The report also says there were around 258,000 new dwellings delivered in the UK in 2016/17, an increase of 13 per cent on the previous year.

“What has been critical to growth in net additions to the UK’s housing stock has been sharp growth in the numbers of conversions, which has been driven by government’s granting of permitted development rights for the conversion of empty offices into dwellings. Although there will inevitably soon be a shortage of empty offices suitable for conversion, we expect there to be a shift towards conversions of vacant high street facilities” said Keith Taylor, director of AMA Research.

“There has also been a recent relaxation of permitted rights concerning barns and stable conversions, which should contribute towards growth in the total number of conversions over the next few years”.

For 2017/18, it is estimated to be similar, with 280,000 new homes added to the UK stock.

According to AMA, growth in the house stock has been driven by increased activity in the private housing sector as a result of low interest rates, competitive mortgage deals and the Help to Buy equity loan scheme.

The research also notes that there has been a move away from one to three bedroom flats to four bedrooms, and more, in semi-detached and detached homes, particularly in the capital and the South East. The demand for flats remains the strongest in London.

While private sector housing has seen growth, public sector housing completions is still below government targets, the research highlights. This is put down to public sector funding cuts. In the longer term, AMA forecasts a more balance relationship between supply and demand due to the increasing number of housing associations diversifying into building affordable homes.

28 August 2018
Laura Edgar, The Planner

Having looked into this, it appears to be true and I can only ask: Is this a good idea? The UK is traditionally a home owner nation not a renting one.