Despite the pandemic slightly slowing what looked to be a very impressive rate of growth for the build-to-rent market, the sector has done an admirable job of recovering from the early shock to maintain positive momentum throughout a challenging year.
Research from build to rent specialists, Ascend Properties, shows that the pre-pandemic peak for B2R planning application approval came in Q2 2019 when 6,682 applications were submitted. Of these, 4,151, an all-time high of 62%, were granted full planning consent while 2,531, an all-time low of 38%, were either rejected or voluntarily withdrawn.
By the time the COVID-19 pandemic began in Q1 2020, applications had risen to 7,900 submissions but the amount being granted was down to 52% while rejections and withdrawals rose to 48%.
Planning permission applications are a useful way to measure UK B2R performance because they show exactly how many developments are being conceived, how many of those result in permission being granted, and how many are either refused or withdrawn by the applicant. It enables us to examine both developer appetite and local authority willingness to push for a B2R boom in this country.
Q2 2020 brought a predictably significant slump for the sector. While the total number of B2R applications only fell slightly to 6,530, the approval rate dropped significantly to just 39%, while rejection and withdrawal jumped to almost 61%. However, from this point forward, the B2R sector quickly returned to a steady rate of growth.
By Q1 2021, after a year of pandemic and lockdown, the B2R sector showed signs of being on the brink of a post-pandemic boom. An all-time high of 11,975 planning applications were submitted, up 52% on the year. Of these, 58% received full approval, a rise of almost 6% since the start of the pandemic, while 42% were either rejected or withdrawn, a drop of nearly -6% on the year.
Ged McPartlin, Managing Director of Ascend Properties, commented: “It’s clear that build to rent is becoming the go-to choice for developers, with projects popping up both in major cities and smaller regional towns.
“But what we’re also seeing is a clear uptick in willingness from local planning authorities to grant permission for build to rent developments. While developers sense high yield, low-risk opportunities, local authorities sense an opportunity to simultaneously meet the demand for new homes while rejuvenating and reinvigorating their economies and communities by introducing this new, dynamic way of living.”