London Build to Rent report released

26th February 2020

London skylineMolior review London’s residential development market on a quarterly basis. In their overall summary of 2019 they reported that construction starts, completions and new homes sales were all down.

They did however find grounds for optimism, with completions and sales numbers showing a marked improvement in the final quarter with the sales rate in Q4 being a par with the average across 2017. Given that 2017 is the second-best year on record this is a notable result.

Interestingly more than 30% of the Q4 sales were attributed to the BTR sector, with help to buy viewed as being a major driver of sales.

Dan Margott, LSL Land & New Homes Land Director, London / Home Counties, commented “I think, we can all agree, that 2019 was a tough year for sales across London and Greater London. Two delays to Brexit and a general election certainly didn’t help to create a stable market, as highlighted in the Molior report. However, the fact that Q4 was the strongest of 2019 speaks volumes; not only have investors come back to the London market but, so too, have developers. This, steady, rise in unit sales is the confidence developers require to acquire new sites. The BTR and Help to Buy models have, also, continued to grow at a very healthy rate, and I feel these will continue to do so, during 2020. It is my opinion that the market has turned a corner from the uncertainty of 2019. Whilst we still have some challenges to overcome, the amount of unsold stock being one, with Government stability comes a stable property market; a positive sign we all need for a successful 2020.” Contact Dan…

Katherine Rose, Prsim Director of PRS & Build to Rent Client ServicesKatherine Rose, Prsim Director of PRS & Build to Rent Client Services, “The analysis of 2019 Q4 London market compiled by Molior is invaluable and is confirmation that the market has not, reassuringly, been effected by the political uncertainty.  It is interesting to see that where sales slowed, the strategy moved to rentals; bringing with it the availability of bulk deals. There was a large reduction in the number of units commencing construction in 2019, compared to the same period in 2018 and, of those, over 70% of the 3821 where construction had started, were in outer London. It was positive to see, in excess of, 4300 of BTR units were completed in 2019. It will be interesting to see what 2020 brings, and whether Brexit transition proves to have positive impact on BTR. If the opposite happens, and sales continue to stall, there may well be an even larger transition into BTR culminating in an increase of BTR units.” Contact Katherine…