Latest analysis from the British Property Federation and Savills highlights the significant challenge the new homes market faced in 2025, a sector that was hit by wider economic headwinds and a failure in regulatory processes.
In London, only 613 new build-to-rent homes started construction last year, a fall of 80% compared to 2024 and indicative of the wider challenges facing the new homes market in the capital.
While the London market was particularly affected by delays at the Building Safety Regulator and viability challenges, the same pressures were felt elsewhere in the country with build-to-rent starts falling 37% in the regions from 12,781 in 2024 to 8,063 in 2025.
The number of build-to-rent homes with detailed planning consent has risen by 17% on the year, with 67,307 consented nationwide. Should these proceed to construction there is the potential to increase the availability of build-to-rent homes, but the pace of projects proceeding from detailed planning consent to construction and completion continues to be slow as the market treads a cautious path into 2026. The statistics also point to long-term pipeline issues with detailed application down 21% on the quarter and completions outpacing starts for the eight consecutive quarter.
Build-to-Rent homes have made a vital contribution to housing supply since their inception, with 146,700 homes across the country, a growth of 13% in the last 12 months. However, the slowdown in construction activity is indicative of the broader challenges that dogged the housebuilding sector in 2025, including significant delays at the Building Safety Regulator which helped up developments everywhere, particularly in the capital. Other factors also continue to weigh heavily on the market, including build cost inflation, interest rates, policy uncertainty in the run up to the late Budget and the geopolitical climate.
Danny Pinder, Director, British Property Federation, said, “Build-to-Rent homes are a critical part of the new homes market and can make a key contribution to the Government’s ambitious 1.5 million homes target, especially given the model’s incentive to deliver high-quality professionally managed homes at pace. Incoming regulation for the wider rental sector as well as broader tax changes announced at the Budget will continue to accelerate landlord departures from the private rented sector and adversely impact the supply of buy-to-let homes in markets across the country, placing even more urgency on the need for purpose built rental housing to ensure the supply of rental homes keeps pace with demand.
“Changes implemented at the Building Safety Regulator towards the end of 2025 are showing signs of having an encouraging impact on the speed of decision-making. If 2025’s regulator delays can be eliminated in 2026, this should help remove one significant barrier to the delivery of new homes and alleviate some of the viability challenges developers are facing. Planning reform should also start to take shape in 2026, providing increased certainty around delivery and translating into an uptick in construction activity. Nevertheless, today’s statistics highlight the scale of difficulties facing the sector and the housing delivery pipeline as we head in to 2026.”
Guy Whittaker, Head of UK Build to Rent Research, adds, “While the fall in starts is stark, particularly in London, there are signs of resilience in the regional picture and in the growing pipeline of consented schemes. The priority now is to convert planning permissions into delivery. With housing firmly identified as a priority by the government and demand for rental homes continuing to outstrip supply, strengthening investor confidence, and accelerating decision making will be essential this year.”
