Build-to-rent fails to meet demand despite record investment
Knight Frank says demand is outstripping supply of build-to-rent homes with regional markets suffering the most.
New build-to-rent figures reveal record investment in the sector is failing to deliver the number of homes needed.
Knight Frank says “mounting viability pressures across regional markets” is holding back build-to-rent developments.
The agency has released its latest market update for April to June this year, showing that demand is outstripping supply.
Key findings
Key findings reveal that more than 6,700 buy-to-rent homes have been completed so far in 2026, with London and Tier 1 cities, including Manchester and Birmingham, accounting for almost half of all delivery.
Tier 2 cities – such as Nottingham, Liverpool and Sheffield – accounted for just 14% of completions, with a further 14% delivered across smaller towns and regional locations.
Meanwhile, viability pressures remain acute across regional towns and cities, with many schemes requiring grant funding, Section 106 flexibility or affordable housing adjustments to remain deliverable.
The market update also revealed that the UK’s completed build-to-rent stock stands at 166,359 homes, up 17% year-on-year, with a further 49,620 homes under construction and 125,639 homes progressing through the planning pipeline.
In the second quarter, build-to-rent investment volumes reached a record £2.08billion, driven by a small number of large transactions highlighting continued investor appetite for the sector.
The challenge now is ensuring that development opportunities can stack up financially.”
Nick Pleydell-Bouverie, Head of Residential Investment at Knight Frank, says: “The investment case for BTR remains incredibly strong. Demand for high-quality rental homes continues to outstrip supply in many markets, supporting strong occupancy levels and rental growth across the sector.
“The challenge now is ensuring that development opportunities can stack up financially so that much-needed new supply can be delivered.”
Last year, LRG called on the Government to make build-to-rent central to its housing strategy, warning that the 1.5 million homes target is unachievable if it fails to encourage investment in the sector.
