The number of new Build to Rent (BTR) developments starting construction across the UK has fallen by 79% in the year to June, according to new research from Real Estate:UK (RE:UK) prepared by Savills. This decline is described as one of the largest recorded by the sector.
The drop was more pronounced outside London, where starts fell by 84%, compared to a smaller but still significant decline in the capital. This slowdown is also impacting construction activity, with the number of BTR homes under construction nationwide decreasing by 21% in the second quarter compared to a year earlier.
RE:UK attributes this trend to mounting viability pressures, as developers face higher costs and tougher market conditions. Investors are reportedly favouring completed BTR assets over funding new developments. Political uncertainty, including concerns over potential rent freezes and rent controls, is also weighing on confidence, with a survey indicating investors would reduce investment if such controls were introduced.
Despite the slowdown, BTR continues to contribute significantly to housing supply, accounting for approximately 8% of all new homes completed across the UK.