A new report shares new insights into the growth of London's Building Leasing (BtR) sector and how the capital's planning policies are encouraging this growth.

Demand for building rental properties is on the rise and investor interest is growing, which has driven a significant increase in BtR planning permissions.

However, the Rental Planning Insights Report by national consultancy Lichfields shows that planning policies in all boroughs are mixed and can do more to provide a comprehensive or consistent basis for a new London BtR scheme.

An important finding highlights the glaring inconsistencies in how BtR is being addressed in local planning policies across the capital.

Of the 35 local planning authorities in London, 46% do not mention BtR in their ongoing or adopted local plans.

The London Plan provides a strong policy basis for the development of BtR, but this support has not always been echoed by local boroughs.

Nearly half (45%) of the bespoke BtR sites are located in central London, and 41% of bespoke BtR developments are secured through specific planning applications, in the four boroughs of Brent, Newham, Ealing and Enfield alone.

Adam Donovan, Litchfield's planning director, who co-authored the report with Ben Kelway, said:

"Our study of London's build-to-let sector provides clear insights into the growth of this market and how planning policies can fit.

It is clear that while the London Plan provides a strong and positive framework for 'build to rent', the boroughs also need to respond to this support.

Districts must take a more proactive approach and adjust their planning policies to truly take advantage of the benefits of "build-to-rent."

Failing to do so, London's BtR sector is being adversely affected, despite the high demand for safe, well-managed rental properties.

If local authorities develop customized policies for BtR development, the sector will become stronger and more stable, helping to meet the capital's long-term housing needs. ”

Compared to traditional options for sale, the London Plan advocates greater flexibility in the design policy of BtR scenarios.

However, Litchfield's research shows that this does not happen in practice.

For example, half (50%) of BtR projects in London received planning permission as residential developments, but were later managed by BtR operators.

The report found that the local borough's policy has consistently failed to distinguish between housing for sale and BtR programs, meaning that BtR applications are evaluated against policies designed for private sale developments.

This requires each BtR planning application to provide a separate justification, which makes the BtR planning process more complex than it needs to be.

Ben Kelway, Senior Director at Lichfields, added:

"What is needed now is greater differentiation in development management policies and greater flexibility in the application of these policies to assist in the implementation of the BtR program.

In particular, policies on design standards, landscaping requirements and residential mixes should reflect the characteristics of "urban mobility".

Over the past 10 years, the BtR policy has come a long way as the industry has matured and continued to grow. However, the planning system at local government level can do more to promote and facilitate BtR development in London.

The opportunities presented by high-quality BtR developments in the right locations are huge when it comes to housing delivery, affordable housing and London communities.

With the right local policies, London's BtR market can thrive and, more importantly, create a blueprint for 'building rental housing' across the country.

We must push build-to-let initiatives higher on the housing agenda so they can make a positive contribution to housing delivery in London and across the country." ”

The report reviews BtR planning applications approved since 2009.

It assesses the spatial distribution of these developments across London boroughs and analyses how these development patterns align with policy.