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The Rise of Build to Rent Development

Tue 10 December 2019

The Planning and Development team at youngsRPS is currently working on behalf of several clients looking to secure sites for Build to Rent accommodation within Newcastle.

The revision of the National Planning Policy Framework back in 2018 included, for the first time, a separation of the Build to Rent (BtR) sector from other tenure classes in response to the increase in delivery of such schemes across the country; the revisions were introduced to clarify the requirements for affordable housing provision in respect of BtR accommodation. BtR differs from other private rented tenures by offering a cohesive and purpose-built development with valuable communal facilities, which are importantly owned and managed by a single party, enabling the landlord to provide secure and longer tenancy agreements.

Recognising that BtR has an important role within urban planning, National Planning Policy also now ask local planning authorities to establish future requirements in their area. Any identified needs should be addressed in local planning policy, including the identification of suitable locations for BtR schemes and setting out clear policies to assist in its successful delivery. We expect to see specific BtR allocations emerging, however, in the short term the reliance is on developers to seek appropriate opportunities to keep pace with the growing demands of this sector.

Although the North East does not account for a large proportion of the BtR sector on a national basis, particularly when compared with the South East, we are starting to see more activity from developers in Newcastle and Gateshead. The most recent scheme to be approved is Strawberry Place; the mixed-use development is an important investment and will introduce 315 additional privately rented apartments, continuing to diversify the city’s housing stock and make a valuable contribution towards housing supply. Whilst schemes such as Strawberry Place and the Forge development on Forth Banks are focused on the young professional market, they do broaden the residential offering for this demographic to the wider benefit of the city, encouraging people to live and work in the area.

Despite similar schemes emerging, Newcastle is still yet to fully unlock the potential of BtR; principally due to a distinct lack of available and accessible sites, with many suitable sites having already been developed for student housing. Development for student living has now slowed with the general view being there is now enough purpose-built accommodation. As a result, this is opening opportunities for BtR schemes.

As available and developable sites become more difficult to identify, the focus will inevitably turn to more constrained sites whereby viability plays a more critical role. In areas of high demand, there may be opportunity to utilise the relaxed permitted development rights introduced in 2015, allowing (for example) a suitable redundant office building in the right location to be converted to residential use. In practice, it can be difficult to retrofit existing buildings to meet the requirements of BtR and few such opportunities remain with many having already been converted to more traditional private rented housing. The key operators of BtR developments also seem to prefer to deliver new purpose-built accommodation.

Whilst BtR is an emerging sector in the North East, the limited availability of sites may constrain the number of schemes that can come forward, particularly when combined with issues of viability. This necessitates the need for professional advice. If you are interested in acquiring sites or obtaining planning permission for residential or mixed use development in the City, please get in touch with our Planning and Development team for early advice at planning@youngsrps.com or call 0191 261 0300.