New data shows BTR development commencements have fallen sharply, with areas outside London hit hardest
Build-to-rent housing starts fell 79% in the year to June, marking one of the steepest declines in BTR development commencements on record.
According to research from Real Estate:UK (RE:UK) prepared by Savills, the drop was most severe outside London, where starts fell by 84%. Nationally, the number of homes under construction declined 21% in Q2 2026 compared with Q2 2025. London saw a 27% fall, against a 19% decline in the regions.
The figures extend a pattern of pipeline exhaustion in which completions continue to outpace new starts and planning approvals. Annual completions have exceeded starts for the 10th consecutive quarter, despite a rise in the number of schemes receiving planning consent.
RE:UK attributed the decline to worsening viability conditions across the BTR sector, which it said is contributing to a shift in investor appetite towards established BTR assets rather than new development. Policy uncertainty — including speculation over potential rent freezes and changes to property taxation — has compounded those pressures.
A survey of investors conducted on behalf of RE:UK, carried out before housing secretary Angela Rayner confirmed that rent controls would not be introduced, found that all respondents would have reduced BTR investment and avoided mayoral areas had controls been implemented.
RE:UK called on the government to avoid further abrupt policy shifts, warning that additional uncertainty risks deepening viability pressures and deterring investment in new schemes.
Despite the fall in starts, build-to-rent continues to account for approximately one in 10 new homes delivered nationally, at 8%.
"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," said Danny Pinder (pictured right), director at Real Estate: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've also had increased regulatory uncertainty, through speculation around rent controls and other potential property taxation changes continuing to impact on investment considerations."
"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," added Jacqui Daly (pictured right), director at Savills Residential Research.
"As demand for rental homes continues to grow, it is important that the sector can continue bringing forward new schemes across the UK."
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
