A commercial property consultancy has urged the Government to change planning policy in order to stimulate Build to Rent (BtR) development.
Lambert Smith Hampton (LSH) highlights the fact there has been a rapid growth in popularity of BtR which has led to it being recognised as a separate asset class in its own right by investors and developers.
However, despite this uptick in interest, LSH argues investment activity is currently limited.
While two thirds of all BtR units delivered to date have been located in London, LSH argues there is a high demand for such developments in the rest of the country.
Analysing various metrics, including affordability constraints, population density and projected economic growth, the property consultancy identified the top 15 regional development hotspots for BtR.
The top five are: Brighton and Hove, Oxford, Reading, Cambridge, and Bristol.
Oliver du Sautoy, head of Research at LSH, said: ‘What’s interesting is that, while the top 15 are unsurprisingly dominated by locations in the South East and East regions, there is a notable disconnect between those and the forthcoming supply. In particular, Brighton - which tops the list – is yet to see a single BtR scheme either completed or in the pipeline.’
LSH believes the disconnect lies with local planning policy and suggests that the Government has a key role to play in allocating sufficient sites for the development of BtR in order to meet this burgeoning demand.
The property experts said that more potential sites could be unlocked for BtR development if the Government recognised BtR as in its own class and offering Discounted Market Rent.
‘We are in no doubt that there is room for significant changes to be made to planning policy to recognise the BtR sector, which would have a noticeably positive effect on supply of BtR homes keeping up with demand,’ said Helen Marks, director of planning and development at LSH.
‘We therefore urge the Government to rethink national policy to encourage local planning authorities to pave the way for BtR development where there is an identifiable need, and in doing so ensure that supply in the regions can keep up with the insatiable demand for this residential class.’
