UK Build-to-Rent Marketbeat Reports

For the data behind the commentary, download the full Q3 2025 UK Build-to-Rent Report.

BTR INVESTMENT ACTIVITY 

Despite a strong investment case and continued confidence in the fundamentals of the sector, the BTR sector continues to face subdued activity. Interest rates being held coupled with wider economic and geopolitical uncertainty hasn’t helped the sector move forward, but arguably the biggest barrier has been a late Autumn Budget. Persistent rumours and speculation have made it nearly impossible for investors to formulate coherent strategies. Uncertainty combined with a narrow spread between BTR yields and the risk-free rate has held back investment.

The nascent nature of the sector also presents challenges. Operational stock remains limited, despite this being precisely what many investors seek, given the long-term durable income stream BTR offers. Where stock does come to market, often from developer-traders or those at the end of a business plan, owners are still pricing at yields 50–75bps keener than what the market can realistically absorb today. With a clear understanding of the long-term value of these assets, many owners are choosing to hold, particularly given current challenges around exits such as building safety and fire remediation concerns.

On a more positive note, the development route to market is improving. Development lending is now at its highest level since tracking began in 2011. As financing becomes both more readily available and more competitively priced, we are seeing equity investors increasingly pivot towards debt strategies. This improved funding environment is enabling more schemes to be brought forward. 

In London, the recent announcements to boost housing delivery are predominantly focused on the for-sale market, however, the package outlines that BTR schemes which meet the criteria in London Plan H11 can provide affordable housing that is intermediate rent, with 30% at or below London Living Rent levels and 70% at a range of genuinely affordable rents. BTR may also benefit from CIL relief. For those who can act quickly on the recent announcements, viability could be improved. 

With a lack of completions coming forward and more development finance available, those developers or investors who can mobilise now will have 'first restarter' advantage. If they can get ahead of the development slump and deliver multifamily into a shrinking new homes market, they will be the ones that exceed.