Only 613 new build-to-rent (BTR) homes started construction in London last year, a fall of 80% compared with 2024, according to new analysis from the British Property Federation (BPF) and Savills.
Elsewhere in the country, BTR starts fell 37% from 12,781 in 2024 to 8,063 in 2025. The number of BTR homes with detailed planning consent rose by 17% last year, with 67,307 consented nationwide.
The Building Safety Act, build cost inflation, interest rates, policy uncertainty in the run up to the late Budget and the geopolitical climate all weighed heavily on the market.
Danny Pinder, director at the 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 at Savills, added: “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.”
