The UK’s Build to Rent (BTR) sector has slowed sharply, with new developments starting on site falling by 79% in the year to June. The figures come from research by Real Estate:UK (RE:UK) and Savills.
Regions hit hardest as pipeline collapses
The decline is most severe outside London, where construction starts dropped 84%, compared with a smaller but still significant decline in the capital. Across the country, the number of BTR homes under construction decreased 21% in the second quarter compared with the same period last year. London saw a 27% reduction, while the rest of the UK recorded a 19% decline.
This slowdown reflects what RE:UK describes as “pipeline exhaustion.” Completions have outpaced new starts for ten consecutive quarters. More schemes are securing planning permission, but fewer are progressing to construction.
Viability and politics squeeze investment
Higher costs and difficult market conditions have made new projects less attractive. Investors now prefer completed or operational BTR assets instead of funding new developments.
Political uncertainty has also weakened confidence. Potential rent freezes and controls are discouraging investment. A survey of investors revealed that all respondents would reduce funding for BTR schemes if such policies were introduced. The risk is highest in mayoral areas, where local governments hold greater regulatory authority.
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RE:UK has called on the government to offer clearer policy guidance. Without it, further intervention could worsen financial challenges and reduce the delivery of new rental homes. The sector currently contributes about 8% of all new homes completed in the country, highlighting its importance to housing supply amid broader development struggles.
For tenants, the slowdown means fewer new rental options in a market where demand already exceeds supply. Landlords and developers are adjusting their strategies, focusing on existing assets rather than new builds until costs stabilize or policy risks ease.
Developers sound the alarm
Danny Pinder, director at Real Estate:UK, said the second-quarter figures revealed “one of the sharpest declines in the number of new start-on-sites yet.” He linked the drop to a viability crisis in the sector. “The most significant decline in starts is in the regions, showing that in most parts of the country, new schemes are no longer financially feasible despite strong tenant demand,” he explained.
Jacqui Daly, director of Savills residential research, noted that BTR has become an essential part of housing supply. It can help housebuilders open sites by using investor funding to support delivery. “With demand for rental homes continuing to rise, the sector must keep bringing forward new schemes across the UK,” she said.
The data indicates the sector’s expansion may have stalled for now, at least until economic and political conditions become more stable. Meanwhile, rents continue rising faster in many areas, adding pressure on tenants already facing limited options.
