Latest research from Real Estate:UK prepared by Savills has highlighted the current delivery challenges gripping the Build-To-Rent (BTR) sector, with starts-on-site across the UK falling by 79% in the year to June.
The figures marks one of the biggest falls in BTR development commencements, with the impact felt most acutely outside London, with an 84% drop occurring outside of the capital.
On schemes currently under construction, nationally the number of homes fell by 21% in Q2 2026 compared to Q2 2025, with London experiencing a more substantial drop (27%) than the regions (19%).
This is continuing the trend of pipeline exhaustion, whereby completions exceed new starts-on-site and schemes coming through the planning system, despite an uplift in the number of schemes being approved. This can be seen by the fact that for the tenth consecutive quarter, annual completions have exceeded starts.
The significant drop in the number of starts reflects the broader viability challenges that the BTR sector is increasingly facing and is contributing to the observed flight of investment to established BTR assets, as opposed to new development.
These viability challenges are being compounded by the wider political and policy uncertainty on issues like potential rent freezes and the introduction of rent controls. This can be evidenced by a survey of investors carried out on behalf of RE:UK which found that 100% of respondents would reduce BTR investment and avoid Mayoral areas were rent controls to be introduced.
In response, RE:UK argues that Government needs to avoid creating additional uncertainty or making abrupt and unwelcome shifts in policy if it is to prevent viability pressures worsening and unlock investment into new schemes.
Overall, despite the decline in starts seen, BTR continues to hold its own in terms of overall delivery, accounting for nearly 1 in 10 new homes (8%). This highlights both the vital contribution the tenure continues to make, and the extent to which viability pressures continue to plague the entire housing sector.
Danny Pinder, Director, 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. In addition to viability, we also have increased regulatory uncertainty, through speculation around rent controls continuing to impact on investment considerations.”
Jacqui Daly, Director, 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.”
