(Commonwealth)_ Over the past decade, the UK’s build-to-rent (BTR) sector has evolved from a niche investment concept into a mainstream solution for bridging the growing rental housing gap. With major players like John Lewis entering the space, BTR is now firmly embedded within the broader housing development landscape, offering an innovative response to changing tenant expectations and chronic housing undersupply.
Driven primarily by soaring rental demand and shifting lifestyle preferences, BTR schemes are increasingly popular among tenants who seek high-quality, long-term rental homes. These developments often feature professionally managed accommodation with added amenities such as communal workspaces, gyms, and concierge services—features that modern renters are both seeking and willing to pay a premium for. For investors, this translates into consistent rental returns and the long-term profitability of a maturing and stable asset class.
Recent data from the British Property Federation (BPF) and Savills underlines the sector’s continued momentum. As of 2024, the total number of completed build-to-rent homes across the UK has reached 127,000, following the completion of over 17,000 units in the past year alone. Of this, 55,400 are located in London, while the remaining 71,700 are spread across regional cities, highlighting the growing significance of BTR beyond the capital.
Interestingly, regional areas are now outpacing London in terms of annual completions. The number of new BTR units completed outside the capital rose by 18%, compared to a 13% increase in London. This trend suggests that regional markets are becoming key growth zones, driven by both affordability and investor interest in emerging urban centers.
However, the outlook is not without challenges. Despite robust completions, new BTR project starts have declined, with a 16% year-on-year drop in detailed planning applications. This slowdown is not due to waning demand but rather a series of systemic obstacles within the planning and construction pipeline. Sector experts point to issues including planning delays, rising construction costs, and regulatory hold-ups as the main culprits.
A particularly pressing concern is the bottleneck caused by the Building Safety Regulator, which has been cited as a significant source of delay in project approvals. Melanie Leech, chief executive of the British Property Federation, stated that while investor interest remains high, regulatory inefficiencies are holding back many projects. “Urgent action is needed in particular to deal with the pipeline blockage currently being caused by the Building Safety Regulator,” she stressed.
In response, the UK government is integrating BTR into its wider housing strategy, recognizing its potential to help achieve the national goal of delivering 1.5 million new homes by 2029. Although there is growing skepticism around whether this target can realistically be met, especially amid ongoing market uncertainties, there are signs of policy alignment that could benefit BTR developments.
The updated National Planning Policy Framework (NPPF) signals the government’s intention to fast-track housing delivery. With an annual target of 370,000 new homes, the revised policy includes changes to how housing need is assessed, particularly in high-demand regions. This, combined with a push for planning reform and a renewed focus on unlocking regulatory delays, could offer the BTR sector the certainty and momentum it needs to thrive.
As Leech notes, the government’s long-term housing strategy must continue to prioritize BTR’s unique strengths. “There’s no doubt that the sector’s ability to rapidly deliver high-quality, professionally managed homes will remain a vital part of the UK’s housing mix and the Government’s ambitious 1.5 million homes target.”
If planning and regulatory challenges can be effectively addressed, BTR is well-positioned to play a pivotal role in the UK’s housing future, delivering homes quickly, reliably, and in line with modern tenant expectations.
