A fresh analysis of more than 11,000 homes across London has shed light on how the Build-to-Rent (BtR) sector is evolving in the capital, with the number of homes under construction dropping despite the city’s severe housing crisis.

BtR properties are specifically designed to meet the needs of renters, offering professionally managed homes with a range of amenities. The Mayor’s housing strategy highlights how the sector helps to drive inward investment, maintain delivery throughout market cycles and accelerate provision of new homes.    

The latest ‘Who Lives in Build-to-Rent? London’ report from BusinessLDN, the British Property Federation, PriceHubble and the Association for Rental Living, highlights how BtR homes under construction in the capital fell by 11% between the third quarter of 2023 and Q3 of 2024, dropping from 17,441 to 15,526.

Though completions rose 13% to 51,516 over the same period, the number of dwellings at planning stage stagnated, rising 1% to 33,756. The total BtR sector pipeline grew by just 5% in London over the year.  

The figures come amid a backdrop of high borrowing and delivery costs, construction skills shortages and insufficient capacity within local authority planning teams. Last summer also saw the multiple dwellings relief – a stamp duty incentive for investors acquiring several homes at once – come to an end.

A wider lack of supply of homes across London is seeing the capital’s boroughs spending £4m daily on temporary accommodation.    

Stephanie Pollitt, Programme Director for Housing at BusinessLDN, said:​“Build-to-Rent has an important role to play in tackling London’s housing crisis, so the sharp drop in homes under construction over the past year should be a cause of concern for all levels of government. The current spending review is an opportunity to ensure that the Government is enabling housing developments of all types, including through a more ambitious Affordable Homes Programme. Policymakers should also work together with the Build-to-Rent sector to mitigate spiralling delivery costs, ensure the right investment incentives are in place and accelerate delivery of much-vaunted planning reforms.”

As part of the new report, PriceHubble aggregated and benchmarked demographic data provided by nine BtR providers – covering 32 schemes and totalling 11,404 homes across London – against comparable data from the wider private rented sector (PRS) to understand whether renters choosing BtR differ from the wider rental population. Its findings show that:

• Age demographics of BtR occupants track the wider rental market very closely. 25-34 is the most common age bracket for occupiers in both BtR (50%) and the wider PRS (48%), followed by 16-24 (29% and 25% for BtR and PRS respectively) and 35-44 (14% and 17%).  
• In terms of income brackets, BtR mirrors the wider PRS for renters earning £26,000-£49,999 (38% and 45% respectively). For both, this is the dominant income bracket although BtR has a higher percentage of renters earning £62,000 or more (39% versus 27%).
• For employment sector, finance and professional services industries are well represented among renters choosing BtR and the wider PRS (26% and 27% of occupiers respectively), as is the Tech sector (16% and 10%) and the public sector (13% and 13%). BtR is especially popular among students, with this cohort representing 31% of renters in the BtR sector, compared to 9% in the wider PRS. 

Theo Plowman, Assistant Director, British Property Foundation, said: “This report reinforces the growing evidence that Build to Rent plays a crucial role in supporting the private rented sector, particularly in London. BtR is essential for middle-income households, offering safe, high-quality, and secure accommodation. It is therefore deeply concerning to see a decline in construction starts. Despite repeated warnings about the challenges impacting the pipeline issues persist, especially with how London boroughs are implementing policies for BtR and the increasing difficulty of making projects financially viable.”

Sandra Jones, Managing Director at PriceHubble, said: “This is the fifth year in which we have conducted this research and the findings are more robust each year as the sample grows. This independent research was designed to explore whether the BtR sector caters for a narrow segment of the renter population but it has consistently found that the type of people choosing to live in BtR mirror the wider private rental sector surprisingly closely. This demonstrates that the BtR sector has a key role to play in meeting the needs of the wider rental population and addressing the challenges of supply.” 

Brendan Geraghty, CEO at The Association for Rental Living, said: “In this latest report, the fourth edition, we see evidence of the continuous close alignment of the Build to Rent sector with the Private Rented Sector, providing homes to all types of Londoners regardless of their age, income, or employment. We welcome these findings which reinforce the consistent and predictable nature of the Build to Rent proposition – hallmarks of its success and appeal.

“The double-digit growth in the completion of new Build to Rent homes in London also detailed in the report is encouraging, yet the fall in homes under construction underscores the ongoing need to push housing to the top of the agenda. We know the Government’s housebuilding plans are ambitious, but we all must work together to change the status quo and seek to deliver. The Build to Rent sector has a huge volume of capital ready to be deployed and we continue to call on the Government to take action to attract investment, for example by the reinstatement of Multiple Dwellings Relief.”