UK: The build-to-rent (BTR) sector is on track to attract a record £6 billion in investment in 2025, according to property consultancy Lambert Smith Hampton (LSH).
Nearly 60 per cent of BTR units currently under construction are located outside London and Greater Manchester. Birmingham is leading regional growth, with more than 16,000 units either in planning or development.
Notable schemes include Moda’s Loudon’s Yard (398 homes) and Cortland’s Broad Street (440 homes).
New BTR formats are helping to diversify the market. Single-family rental (SFR) and co-living now account for a significant share of the national pipeline, with co-living beds increasingly delivered in cities like Manchester and Bristol.
Co-living now makes up 15 per cent of the development pipeline, with 46 per cent of those units located outside London.
The number of operational BTR homes has more than doubled in four years, exceeding 130,000 in early 2025.
A further 56,500 units are under construction, with 126,000 in planning. Investment into stabilised assets is also increasing: £1.1 billion of BTR capital was deployed in Q1 2025, following a record £5.2 billion in 2024.
Recent deals include Ridgeback’s £126 million acquisition of Equipment Works in Walthamstow and QuadReal and Realstar’s joint purchase of Birmingham’s Allegro for around £115 million. Stabilised assets accounted for 48 per cent of Q1 multifamily investment, up from 27 per cent in 2024.
Rents are expected to grow by 4.5 per cent in 2025, after cooling last year. Hamptons projects long-term average annual growth of 4.0 per cent, supported by structural undersupply and legislative shifts such as the Renters’ Rights Bill.
Simon Wilson, senior director and head of LSH Living and Capital Markets, said: “2025 is set to mark another milestone year for the UK BTR sector. The market is becoming more diversified, with a sharp rise in regional activity, ongoing demand for SFR, and stronger trading of stabilised stock. Institutional capital is driving the next phase of growth.”
Highlights:
• UK BTR sector forecast to hit £6 billion in investment in 2025, the highest annual total on record
• Regional cities like Birmingham driving BTR growth, with nearly 60 per cent of construction outside London and Manchester
• Single-family rental and coliving developments fuel diversification, making up a growing share of the UK BTR pipeline
