Columnist

The changing shape of the rental landscape

The UK housing market is transforming with the build-to-rent (BTR) sector emerging as a mainstream solution to shifting economic and social trends.

Once seen as niche, BTR developments – purpose-built homes designed for long-term renting – are now reshaping urban housing, especially in major cities like London, Manchester, Birmingham, Leeds and Glasgow.

Driven by rising house prices, tighter lending rules and changing attitudes toward ownership among younger generations, BTR offers a professional community-focused alternative to traditional renting.

These developments often include high-quality amenities such as gyms, co-working spaces, concierge services and smart home technology, mirroring the successful evolution of purpose-built student accommodation.

Unlike conventional rental models, BTR properties are backed by institutional investors, such as pension funds, real estate investment trusts and large property firms, which focus on long-term income over short-term gains.

Professional management ensures consistent quality, community engagement and a hassle-free tenant experience.

Investment in BTR has soared to more than £4 billion annually, with more than 250,000 homes in the pipeline.

Yields between four per cent and six per cent make the sector attractive compared to commercial property or bonds, while also creating jobs across construction, property management and services.

Local authorities see BTR as a way to address housing shortages without straining public resources.

Many developments act as catalysts for urban regeneration, combining housing with improved public spaces, retail and leisure facilities.

Initiatives like resident panels, wellness programmes and community events promote strong local ties and reduce tenant turnover.

However, affordability remains a concern.

The premium amenities and management often lead to higher rents than private alternatives.

To address this, some developers are incorporating mixed tenure models, blending market rate, affordable and social housing in one scheme to promote social integration.

Planning regulations are another barrier.

Local authorities often struggle to evaluate BTR proposals under frameworks designed for ownership-led developments.

A more flexible modern approach is needed to support innovation in housing design.

Sustainability is also shaping the future of BTR.

Developments increasingly feature energy-efficient designs, solar panels, green roofs and smart building systems.

As ESG standards become essential for institutional investors, environmental responsibility is no longer optional.

Though London remains a BTR hotspot, regional cities are catching up, driven by strong local economies and more affordable land and construction costs.

Cities like Glasgow, Edinburgh and Birmingham are seeing rapid growth, with predictions the sector could surpass 500,000 homes by the end of the decade.

Looking ahead, the sector may expand into suburban family housing, senior living communities and co-living spaces.

Public/private partnerships could unlock brownfield development near key transport links, aligning housing with job growth.

Ultimately, BTR is redefining the rental landscape by offering stability, quality and community.

Its success will depend on maintaining a balance between profitability, affordability and sustainability, with collaboration needed across government, investors and communities to ensure long-term impact.

Tim Barrett is chair of Construction Alliance North East

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