Build-to-rent starts plunge 79%

Starts on new build-to-rent homes fell 79% in the year to June 2026, according to a Savills analysis for Real Estate:UK.

That left 2,176 homes entering construction, down from 13,893 a year earlier.

Starts outside London fell 84%, while the number of homes under construction nationwide was 21% lower in Q2 2026 than in the same period last year.

London recorded a 27% decline in homes under construction, compared with a 19% fall across the regions.

A report last week from Knight Frank also highlighted a big drop in BtR completions with developers struggling with financial viability.

Regional schemes stall

Danny Pinder, a director at Real Estate:UK, said: “The Q2 2026 delivery figures have shown one of the sharpest declines in the number of new start-on-sites yet, and undoubtedly reflect the impact the viability crisis is having on the development of BTR schemes across the UK.

“That the sharpest decline in starts is within the regions is yet further evidence of the fact that, in most parts of the country, it is now unviable to bring forward new schemes despite strong underlaying tenant demand.”

He added: “In addition to viability, we’ve also had increased regulatory uncertainty, through speculation around rent controls and other potential property taxation changes continuing to impact on investment considerations.”

Jacqui Daly, a director of Savills Residential Research, said “Build to rent has become an increasingly important source of housing supply, with the potential to unlock new development by enabling housebuilders to open sites with investors underwriting delivery.

“As demand for rental homes continues to grow, it is important that the sector can continue bringing forward new schemes across the UK.”

Development pipeline shrinks

Annual completions have exceeded starts for the tenth consecutive quarter, despite an increase in the number of schemes securing approval.

Real Estate:UK said the development pipeline was being exhausted as completed homes continued to outnumber new starts and projects moving through the planning system.

The organisation said viability pressures were also directing investment towards established build-to-rent assets rather than new development.

Recent uncertainty over possible rent freezes and changes to property taxation had added to those pressures, it said.

Policy uncertainty hits sector

An investor survey commissioned by Real Estate:UK before Angela Rayner confirmed rent controls were off the table found that every respondent would have reduced build-to-rent investment if controls were introduced.

All respondents also said they would avoid mayoral areas where rent controls were adopted.

Real Estate:UK urged the government to avoid abrupt policy changes that could worsen viability pressures and deter investment in new schemes.

Despite the decline in starts, build-to-rent homes accounted for 8% of all new housing delivered, equivalent to nearly one in 10 homes.