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Developers need certainty, investors need scale, and build-to-rent can bridge the gap, says Justine Edmonds, director of BTR at LRG.
Housebuilding has always been cyclical. However, the current market faces number of pressures on viability: build costs, the cost of borrowing, declining consumer confidence, and extensive planning requirements such as building safety and biodiversity net gain costs.
Against that backdrop, I am seeing a significant change in how schemes come into being. The most deliverable projects are not necessarily those with the best land or the slickest marketing suite. They are the ones with a capital structure that can adapt to changing financial circumstances. Increasingly, that points to joint ventures between developers and build-to-rent (BTR) providers.
This is not about replacing private sale or trying to edge out affordable housing, but about creating schemes that can actually be built, occupied and maintained as places rather than plots on a masterplan.
The challenges
We often talk about housing in terms of need, targets and the moral case for supply. All are true, but delivery is governed by something more prosaic: cash flow.
A sales-led scheme is only as fast as the market can absorb it. When the market is strong, that is a driver. When sentiment softens, it becomes a brake. Developers end up drip-feeding completions, deferring infrastructure, re-phasing masterplans and hoping conditions improve before momentum is lost.
Even the best operators cannot outrun the maths. If sales rates dip, the scheme slows, the cost of finance rises and the risk margin goes up. At that point, the question is no longer “can we build it?” It is “can we keep building it?”
That is where a joint venture model changes the calculus. It replaces a reliance on buyer confidence with a reliance on contractual certainty.
How BTR changes the funding equation
The simplest way to describe BTR’s value in a mixed scheme is that it can turn part of the development into an income-producing asset from day one.
Unlike private sale, BTR does not need a long sales curve. It needs homes that are finished, well-managed and in the right place. For the developer, that means a portion of the scheme can be forward funded or forward purchased. For the investor, it means access to product that is hard to assemble in fragmented markets.
This is not just theory. Investor demand for UK BTR continues to deepen, with particular strength in single family housing – a sign that suburban, lower-density rental is no longer a niche. In 2025, UK BTR investment reached just under £4.7 billion, with single family housing attracting a record £2.6 billion. (CBRE)
What matters for delivery is what this capital can do on a live site: it can underwrite early phases, keep contractors on programme and reduce exposure to the most volatile part of the cycle.
A staged model that suits both parties
In practice, the most effective joint ventures follow a staged approach.
The first stage is early alignment. Ideally BTR should not be bolted on at the reserved matters stage, when the scheme has already been designed around private sale assumptions. It works best when it is planned in from the outset – with its own branding, identity and servicing strategy, while still sitting naturally within the wider place.
The second stage is agreeing the right deal structure. That might be an equity JV, a development agreement with profit share, or a forward funding arrangement with clear delivery obligations. While the specifics vary, but the principle is always that both parties share upside and both parties manage risk.
The third stage is phased handover. This is where BTR has an advantage over discounted tenures. Affordable housing remains essential, but because it is delivered at a discount it cannot always carry the same weight in funding early infrastructure. BTR, priced at full market levels, can. It can sit alongside affordable delivery and help stabilise the wider scheme.
The fourth stage is operational readiness. The value of BTR is not simply in getting homes built, it is keeping them running at a high standard for the long term – maintenance, resident service, management, renewals and community stewardship. That operational discipline is exactly what many local authorities and communities want to see, especially on larger sites where poor management can undermine confidence in development for decades.
Mixed tenure can be better placemaking
Much of this would suggest that BTR can be a purely financial tool, but it is so much more than that.
Well-integrated BTR can help a place feel “lived in” earlier. It can support local centres sooner. It can create footfall for shops, cafes and services before the private sale market has fully built out. It can also bring long-term management into the heart of the masterplan – which often means better maintained public realm and more consistent service standards.
I have previously argued that viability debates – including those around high affordable housing requirements on constrained land – cannot be solved through good intentions alone. At a certain point, pushing the affordable percentage higher (for example 50% private sale, 50% affordable housing) does not increase affordable delivery, it reduces total delivery. A broader tenure mix, with BTR as a core component, is one credible way to protect pace and volume without walking away from social outcomes.
Varied partnerships
Joint ventures do not need to be limited to private developer and private investor. In fact, some of the most promising models are emerging in collaboration with local authorities and housing associations.
In large scale developments, councils want infrastructure such as schools, leisure, health provision, transport improvements and civic space in place as early as possible. They also want certainty that places will be managed well and that residents will not be left living on a building site for a decade.
BTR can help here because it offers long-term revenue, not just a one-off receipt. Structured properly, it can support innovative cross-subsidy models – where income from a stabilised rental asset helps fund wider community infrastructure. Housing associations, similarly, can partner where mixed-tenure approaches unlock delivery at scale while protecting affordability outcomes.
This is not always easy. Governance, procurement rules and risk appetites differ. But when it works, it moves the conversation from “how do we split the pie?” to “how do we grow the pie?”
Successful partnerships
If there is one reason joint ventures fail, it is misalignment of time horizons. Developers are geared toward delivery and turnover. BTR investors are geared toward long-term operational performance. The partnership needs to respect both realities.
At LRG, we are increasingly acting as a bridge in these conversations, helping developers and investors find workable structures and realistic operating assumptions, then ensuring delivery is matched by management capability. In my experience, the strongest joint ventures tend to share five traits:
• Early design alignment: BTR requirements for layouts, amenities and management space are integrated from the start.
• Clear phasing strategy: handovers are planned so that occupation supports the wider scheme rather than competing with it.
• Simple governance: decision-making is fast enough to keep pace on site, with escalation routes agreed early.
• Transparent viability: all parties understand where the scheme is tight and what levers exist if conditions change.
• Commitment to quality: not just at practical completion but through long-term performance.
A practical route to faster delivery
There will always be a place for traditional private sale delivery. But if we want resilience and the ability to keep building through uncertainty rather than pausing until conditions improve, then we need capital structures designed for that reality.
Joint ventures between developers and BTR providers are an important response to the simple challenge of building homes in a world where risk has become more expensive and delivery has become harder to sustain.
Done well, they can unlock stalled sites, bring forward infrastructure earlier and create places that function from the start.
