According to research by the BPF and Savills, the time required for BTR planning applications to be approved has shot up over the last decade
Almost half of build-to-rent planning applications are taking at least a year to be approved, according to new analysis by the British Property Federation and Savills.
The research found that 40% of BTR sites that have been granted detailed planning permission in the last year have taken at least a year to do so.
The data indicated that the amount of time it takes for planning approval to be granted for BTR developments has significantly increased in the past decade.
The recent study, conducted in quarter four of 2023, found that the percentage of build-to-rent (BTR) developments requiring over a year to receive planning consent has risen from 7% in 2014 to 40% in 2023.
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The data shows that the planning times for building schemes are increasing due to the application process, despite consistent figures across varying scheme sizes and locations.
In Q4 2023, the number of BTR homes with detailed permission was at an all-time high of 58,000.
However, the number of starts has decreased over the past few quarters, dropping to 12,500 units in Q4 2023 from a post-pandemic peak of 25,000 units in Q3 2022.
Ian Fletcher, director of policy at the British Property Federation, said: “The build-to-rent market has grown significantly throughout the past decade. While reaching such a significant milestone (100,000 homes) for the sector is encouraging, we must ensure current challenges are temporary. Sentiment certainly is improving, and when interest rate cuts become real, rather than talked about, I would expect the sector to expand rapidly, given the strong pipeline of units that exist with planning permission.”
Fletcher added: “We lead an ambitious sector that delivers a great product. A target of 30,000 desperately needed rental homes a year is eminently doable, but it requires support. The research we are making available illustrates one of the structural challenges to the sector – time in planning is getting longer. While we cannot say for certain what part of the planning process is leading to increased times, it is crucial to recognise that the more drawn out the development process, the longer it takes to get to an investor’s goal - income. It does, therefore, matter a great deal and is a brake on the growth of the sector.”
Guy Whittaker, head of UK build-to-rent research at Savills, added: “Investment into build-to-rent proved resilient in 2023, in spite of challenges around the cost of debt and continued material and labour-cost inflation. Investment continues to be directed towards development and the deals struck this year will ultimately deliver 12,000 much-needed homes for private renters. Investor appetite continues to grow, but the time taken to bring homes through the planning system, as our research demonstrates, remains a challenge. With schemes taking longer to work their way from application to permission, this reduces the number of “oven-ready” sites, given investors are unlikely to take planning risk. Boosting the number of consented sites is therefore crucial to allow the sector to deliver on its huge growth potential”.