New Build to Rent (BTR) developments are drying up at an alarming rate, with the number of schemes starting on site across the UK falling by 79% in the year to June, according to new research from Real Estate:UK (RE:UK) prepared by Savills.
The sharp decline is one of the biggest recorded by the sector and is most pronounced outside London, where starts dropped 84%, compared with a smaller but still significant decline in the capital.
The slowdown is also feeding through to construction activity. The number of BTR homes under construction nationwide fell 21% in the second quarter compared with a year earlier, including a 27% decline in London and a 19% fall across the regions.
The figures extend what RE:UK describes as a growing “pipeline exhaustion”, with annual completions exceeding new starts for the tenth consecutive quarter. Although more schemes are securing planning permission, fewer are progressing to construction.
The report points to mounting viability pressures as developers grapple with higher costs and tougher market conditions, prompting investors to favour completed or operational BTR assets over funding new developments.
Political uncertainty is also weighing on confidence. RE:UK says concerns over potential rent freezes and rent controls are discouraging investment, with a survey of investors finding that all respondents would reduce investment in build-to-rent schemes and avoid mayoral areas if rent controls were introduced.
The organisation is urging the government to provide greater policy certainty, warning that further intervention could deepen viability challenges and restrict the delivery of new rental homes.
Despite the slowdown, BTR continues to make a significant contribution to housing supply, accounting for around 8% of all new homes completed across the UK. RE:UK says this underlines both the sector’s importance and the wider development challenges affecting the housing market.
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, commented: “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.”
