A recent report has shed light on the growth of London’s Build-to-Rent sector and how the city’s planning policies are contributing to its expansion
Demand for Build-to-Rent properties is increasing, attracting more investors and leading to a rise in planning permissions.
However, the ‘Planning for Rent Insight Report,’ conducted by Lichfields, shows that planning policies across different London boroughs vary considerably and could be more cohesive in facilitating the development of new Build-to-Rent schemes in London.
One notable finding revealed a significant disparity in how Build-to-Rent is addressed in Local Plan policies across the city. 46% of London’s 35 local planning authorities do not mention Build-to-Rent in their existing or developing Local Plans.
Why the London Plan needs more backing
While the London Plan includes a robust foundation for Build-to-Rent developments, this support is not consistently reflected at the borough level. Nearly half (45%) of designated Build-to-Rent sites are in inner London, and 41% of these specific Build-to-Rent developments, sanctioned through distinct planning applications, are located in just four boroughs: Brent, Newham, Ealing, and Enfield.
“Our study into the sector in London offers a clear insight into the growth of this market and how planning policies are adapting. It’s evident that while the London Plan provides a robust and positive framework for Build-to-Rent, there is a need for individual boroughs to echo this support,” explained Adam Donovan, planning director at Lichfields.
“Boroughs must adopt a more proactive approach and align their planning policies to harness Build to Rent’s benefits genuinely. In failing to do so, the sector in London is being detrimentally affected despite the high demand for secure, well-managed rental properties,” he continued.
Unlike traditional for-sale schemes, the London Plan encourages more adaptable design policies for Build-to-Rent projects. However, Lichfield’s study reveals a discrepancy, even though half of London’s Build-to-Rent properties were initially approved as residential developments for sale and later operated by Build-to-Rent entities.
Change to planning applications is needed
The researchers argue that local borough policies fail to distinguish between for-sale housing and Build-to-Rent schemes. This means applications are evaluated using policies intended for private sales. This complicates the process and leads to individual justifications for each planning application.
“What is needed is greater differentiation in development management policies and more flexibility in their application to assist in delivering schemes. In particular, policies covering design standards, amenity space requirements, and dwelling mix should reflect the specificities of Build-to-Rent,” said Ben Kelway, senior director at Lichfield’s.
“Policy has come a long way in the last ten years as the sector has matured and continues to grow. However, the planning system at a local authority level could do far more to promote and facilitate Build-to-Rent developments in London,” he concluded.
