What is build to rent in 2025?

The UK rental landscape is transforming. While traditional buy-to-let landlords face mounting challenges, a new model is gaining momentum. Build to Rent (BTR) has evolved from a niche concept into a £100 billion sector that's reshaping how Britain houses its renters. Whether you're a small landlord considering your next move or simply curious about this growing market, understanding Build to Rent is now essential.

This article explains what Build to Rent means, how it works, and why it matters for the future of UK housing in 2025 and beyond.

What is build to rent?

Build to Rent refers to purpose-built residential developments designed exclusively for renting rather than sale. According to the UK Government's official definition, BTR properties are "purpose-built, institutionally owned and professionally managed residential property that is let on the open market rather than sold."

Unlike traditional rental properties owned by individual landlords, Build to Rent schemes are developed and managed by institutional investors such as pension funds, insurance companies, and property development firms. Think names like Legal & General, Grainger, Lloyds Bank, and even John Lewis.

The distinction is significant. While a typical buy-to-let property might be a converted Victorian terrace managed by an individual landlord juggling a small portfolio, Build to Rent developments are purpose-designed communities with professional on-site management, dedicated amenities, and standardised tenant experiences across entire buildings or estates.

How does build to rent work?

The Build to Rent model operates on a fundamentally different principle to traditional buy-to-let. Instead of purchasing individual properties to rent out, institutional investors finance entire developments from the ground up with the sole intention of holding and managing them as long-term rental assets.

The typical BTR development process follows these stages:

Land acquisition and planning: Developers identify suitable sites in high-demand urban locations and secure planning permission for purpose-built rental housing.

Development and construction: The entire scheme is designed with renters in mind from inception, incorporating features like communal spaces, high-quality finishes, energy efficiency, and shared amenities.

Professional management: Once complete, the development is managed by specialist property management companies who handle everything from tenant screening to maintenance, creating a consistent resident experience.

Long-term operation: Rather than selling individual units, the development remains under single ownership and management indefinitely, generating rental income for investors while providing stable, professionally managed homes for tenants.

This integrated approach allows BTR operators to deliver experiences that individual landlords typically cannot match, including longer tenancy agreements (often three years), on-site staff, and comprehensive maintenance support.

The scale of build to rent in 2025

The numbers tell a compelling story. As of 2025, there are approximately 130,000 completed Build to Rent homes across the UK, with another 56,000 under construction and 109,000 in the planning pipeline. According to research from Knight Frank and Savills, the sector attracted over £1.1 billion in investment in Q1 2025 alone, with projections suggesting total annual investment could reach £6 billion by year-end.

London dominates the BTR landscape with 104,025 units, but regional cities are catching up fast. Manchester now has Build to Rent comprising nearly 25% of its private rental sector, while Birmingham, Leeds, Liverpool, and Bristol are all seeing significant development activity.

Despite this growth, Build to Rent still represents only around 2% of the UK's total private rented sector. For context, the private rented sector houses over 14 million tenants across approximately 4.5 million properties. This leaves enormous room for expansion, with some analysts predicting BTR could eventually account for 30% of the rental market.

Build to rent vs buy-to-let - key differences

For landlords familiar with traditional buy-to-let investment, Build to Rent operates under an entirely different model:

Ownership structure: Buy-to-let properties are owned by individual investors or small landlords. BTR developments are owned by institutional investors managing large-scale portfolios.

Scale and management: A buy-to-let landlord might own a handful of properties across different locations, managing them personally or through an agent. BTR schemes involve hundreds of units in single developments with dedicated on-site management teams.

Initial investment: Buy-to-let typically requires capital for one property at a time, often financed through mortgages. BTR demands tens or hundreds of millions in development capital, placing it beyond reach of most individual investors.

Tenant experience: Traditional rentals often involve dealing with individual landlords, short-term contracts, and variable property standards. BTR offers standardised quality, professional management, longer tenancies, and extensive amenities like gyms, co-working spaces, and concierge services.

Regulatory treatment: BTR benefits from specific planning policy provisions including flexibility on affordable housing contributions, with schemes typically providing at least 20% of units at affordable rent (minimum 20% below market rate).

Who lives in build to rent properties?

While BTR developments initially targeted young professionals in city centres, the demographic is broadening. According to British Property Federation data, today's BTR residents include:

Young professionals (25-34 years): Still the core demographic, drawn to city-centre locations near work, transport links, and lifestyle amenities.

Families (35-44 years): The fastest-growing segment, with Single Family Housing (SFH) BTR schemes offering suburban alternatives with gardens, parking, and proximity to schools.

Downsizers (55+): Older residents seeking to access housing equity while maintaining quality accommodation with community features and support services.

Key workers: Nurses, teachers, and other essential workers benefiting from affordable housing units integrated into BTR schemes.

The common thread is a preference for flexibility, professional management, and community-oriented living without the commitment of home ownership. With house prices continuing to outpace wages and mortgage affordability stretched, renting is increasingly a long-term choice rather than a temporary stage.

The benefits of build to rent

For tenants, Build to Rent addresses many pain points associated with traditional private renting:

Longer tenancies: Standard three-year agreements provide stability for those wanting to put down roots without buying.

Professional management: On-site staff handle maintenance requests efficiently, avoiding the frustrations of unresponsive landlords.

High-quality accommodation: Purpose-built properties feature modern design, energy efficiency, and consistent standards across all units.

Community amenities: Gyms, co-working spaces, roof terraces, and social events foster a sense of community often missing in traditional rentals.

Transparency: Clear tenancy agreements, predictable rent reviews, and professional processes reduce disputes.

For investors and developers, BTR offers attractive characteristics:

Stable income streams: Long-term tenancies and high occupancy rates (often above 95%) generate predictable rental income.

Portfolio diversification: BTR provides exposure to residential property with professional management reducing hands-on involvement.

Capital appreciation: Prime urban and suburban locations offer potential for asset value growth alongside rental income.

Resilient performance: The sector has demonstrated robustness through economic cycles, with strong demand fundamentals underpinning returns.

The growth of single family housing BTR

One of the most significant trends in 2025 is the explosive growth of Single Family Housing within Build to Rent. Unlike traditional multifamily apartment blocks, SFH BTR involves entire estates of houses built specifically for rental.

According to Cushman & Wakefield research, Single Family Housing attracted 45% of total BTR investment in H1 2025, with £2.5 billion deployed into SFH schemes in 2024 alone. This represents more than eight times the five-year average.

The appeal is clear. Families seeking gardens, parking, and suburban locations are finding SFH BTR offers an alternative to unaffordable home ownership. For investors, suburban schemes deliver strong yields (typically 5-8%) with less construction complexity than high-rise developments.

Established players including Lloyds Living, Sigma Capital, and Leaf Living are rapidly expanding their SFH portfolios, while new entrants like Greykite and Kennedy Wilson have entered the market. This suburban expansion is democratising Build to Rent beyond its original city-centre focus.

Build to rent and UK housing policy

The UK Government recognises Build to Rent as crucial to meeting its target of 300,000 new homes annually. With private landlords exiting the market in record numbers and housebuilding struggling to meet demand, BTR represents a viable solution delivered by well-capitalised institutional players.

Recent policy support includes:

The Private Rented Sector Guarantee Scheme: Offering £2 billion in government-backed loans to unlock stalled BTR projects, potentially supporting 13,000 new homes.

Revised National Planning Policy Framework: Increasing housing targets for Local Authorities and encouraging planning consents for BTR developments.

Longer tenancy provisions: The Renters Rights Act will end Section 21 'no-fault' evictions and introduce periodic tenancies, aligning with BTR's already-common practice of offering longer, more stable agreements.

Affordable housing flexibility: BTR schemes can meet planning obligations through affordable private rent (at least 20% below market rate) rather than traditional social housing, better suited to the operational model.

This policy alignment suggests continued government support for Build to Rent as part of broader housing strategy.

The investment perspective - who can invest in BTR?

For most individual landlords, direct investment in Build to Rent development is not feasible. The capital requirements run into tens or hundreds of millions of pounds per scheme, placing this firmly in institutional investor territory.

However, opportunities exist at different scales:

Indirect investment: Purchasing shares in publicly listed BTR operators or Real Estate Investment Trusts (REITs) focused on the sector provides exposure without direct property management.

Small-scale BTR: According to Rangewell research, professional SME landlords are developing small BTR schemes (6-25 units) through conversions of commercial buildings, infill developments, and refurbishments. While still requiring significant capital, this represents a middle ground between individual buy-to-let and institutional-scale BTR.

Traditional buy-to-let: For most small landlords, continuing with traditional buy-to-let remains the practical option. The key is adopting professional practices that BTR exemplifies: using landlord software like August for organisation, maintaining high property standards, offering good tenant experiences, and staying compliant with evolving regulations.

What build to rent means for private landlords

The rise of Build to Rent doesn't spell the end for traditional landlords, but it does raise the bar for professional standards. As tenants experience the quality and service levels BTR provides, expectations for all rental accommodation are shifting upward.

Small landlords can compete by focusing on areas where they hold advantages:

Personalised service: Individual landlords can offer flexibility and personal relationships that large-scale operators cannot match.

Diverse property types: Period properties, character homes, and unique locations remain the domain of private landlords.

Competitive pricing: Without the premium amenities and professional management costs, traditional rentals can offer better value for budget-conscious tenants.

Efficient operations: Using tools like August's property management platform, small landlords can achieve professional standards in compliance, rent tracking, and tenant communication without institutional overheads.

The key is recognising that today's rental market demands professionalism regardless of scale. Tenants expect responsive maintenance, clear communication, legally compliant properties, and respect for their homes. Landlords who deliver these fundamentals while maintaining competitive rents will continue to thrive alongside Build to Rent.

Challenges facing build to rent

Despite robust growth, the BTR sector faces headwinds:

Supply constraints: Construction costs remain elevated, skilled labour is scarce, and planning delays continue. Only 28 projects are scheduled for completion in 2027, suggesting a potential supply crunch.

Affordability concerns: BTR rents typically run 11% above equivalent local market rates, pricing out many potential tenants despite the superior amenities and service.

Limited geographic spread: BTR remains concentrated in major cities and hotspots, leaving many regions underserved.

Competition from traditional PRS: As long as individual landlords can offer lower rents for acceptable quality, they'll remain competitive despite fewer amenities.

Regulatory uncertainty: While the Renters Rights Act generally aligns with BTR operating models, ongoing policy changes create some uncertainty for long-term investment decisions.

Addressing these challenges will determine how quickly BTR can scale from its current 2% market share toward the 30% some analysts project as achievable.

The future of build to rent

All indicators point to continued strong growth. Investment momentum remains robust, with 2025 on track to see record BTR investment. The pipeline of schemes under construction and in planning suggests steady delivery of new supply for years to come.

Several trends will shape the sector's evolution:

Suburban expansion: Single Family Housing BTR will continue growing rapidly as developers target family renters in commutable locations.

Co-living integration: Purpose-built co-living schemes are emerging as a sub-sector, offering affordable accommodation with high levels of shared amenity for young professionals.

Regional diversification: While London and Manchester dominate today, cities like Bristol, Liverpool, Leeds, and Nottingham are attracting increasing BTR investment.

Technology integration: Smart home features, app-based management, and data-driven operations will become standard as BTR operators compete on tenant experience.

Sustainability focus: Energy efficiency, green building standards, and environmental credentials will differentiate premium BTR schemes.

For the broader rental market, Build to Rent's influence will be felt even where BTR developments don't exist. The professional standards, tenant focus, and operational efficiency the sector champions are raising expectations across the entire private rented sector.

Key takeaways for landlords

Whether or not you're directly involved with Build to Rent, the sector's growth carries lessons for all landlords:

Professionalisation is essential: Tenants increasingly expect high standards, responsive service, and clear processes regardless of who their landlord is.

Technology enables efficiency: Modern landlord software helps small landlords deliver professional experiences without institutional resources.

Compliance cannot be compromised: With regulations tightening, staying on top of legal obligations is non-negotiable.

Tenant experience matters: Properties that offer quality, good communication, and smooth processes will always find tenants, even competing against BTR.

Specialisation has value: Period properties, character homes, and personal service remain differentiators for traditional landlords.

The private rented sector has room for both institutional Build to Rent and traditional landlords. Success comes from understanding your position in the market and delivering what your tenants value.

Final thoughts

Build to Rent represents a fundamental shift in UK housing. From just 8,000 units a decade ago to over 280,000 today including pipeline schemes, the sector is maturing into a significant component of the rental market. For tenants, it offers professionally managed, high-quality rental accommodation with long-term stability. For investors, it provides stable income streams and portfolio diversification.

For small landlords, Build to Rent is both competition and inspiration. While few individual investors can directly participate in BTR development, the professional standards and tenant-first approach the sector embodies should inform how all landlords operate.

The rental market is evolving. Those who adapt by combining professionalism with the personal touch that makes small-scale landlords valuable will continue to thrive alongside the growth of Build to Rent.

At August, we help small landlords manage their properties with confidence through our all-in-one landlord app. From rent tracking and compliance management to document storage and smart reminders, August gives you the tools to compete in today's professional rental market. Try August today.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Every effort was made to be accurate at the time of writing.