Build-to-Rent Sector Faces Slowdown

The UK’s booming build-to-rent (BTR) sector is facing a rare setback, with industry leaders warning that government policy, economic headwinds, and regulatory hurdles are making it increasingly difficult to deliver new developments — potentially shaking investor confidence in the multi-billion-pound industry.

A newly launched Build to Rent Alliance, backed by the British Property Federation and the Association for Rental Living, and led by Sheffield MP and former housing committee chair Clive Betts, is sounding the alarm.

Citing new research by Savills, the Alliance reports that the number of new BTR homes entering the planning system has fallen by 18% since the start of 2025, equivalent to a drop of 5,000 homes. While London has seen continued growth in planning activity, regional markets across the UK are stalling — a trend the Alliance says is being driven by worsening viability outside high-value urban centres.

The downturn in planning activity comes amid mounting challenges in the development sector, including higher interest rates, inflation-driven construction costs, and uncertainty around planning and housing policy. Many BTR developers, particularly in regional areas, are struggling to make schemes financially viable under current conditions.

The Alliance is calling for urgent policy and regulatory reforms to address these barriers and restore investor confidence — including streamlining planning processes, clarifying housing targets, and creating a more predictable investment environment.

Beyond investment concerns, the Build to Rent Alliance also aims to improve the public perception and consumer experience of BTR, positioning it not just as an alternative, but a tenure of first choice within the wider private rented sector. The group says it will focus on championing the sector’s role in delivering professionally managed, high-quality rental homes that meet the needs of modern renters.

With the UK facing an acute housing shortage, advocates argue that BTR still has the potential to play a transformative role — but only if the right political will and market conditions are in place.

The Alliance's formation signals a coordinated effort to lobby for change at a critical juncture. If its warnings go unheeded, the slowdown in regional BTR development could deepen — threatening to derail one of the few bright spots in the UK’s housing delivery landscape.