The build-to-rent (BTR) sector saw one of the sharpest falls in the number of new starts on site during the last quarter amid viability challenges and political uncertainty around potential rent freezes and property tax.

A survey of investors on behalf of RE:UK before Housing Secretary Angela Rayner confirmed that rent controls were off the table found that 100% of respondents would have reduced BTR investment and avoided mayoral areas if rent controls had been introduced.

Latest delivery statistics prepared by Savills show starts on site across the UK for new rental housing fell by 79% in the year to June, with the impact felt most acutely outside London (-84%) – 2,176 down from 13,893.

The figures mark one of the biggest falls in BTR development starts. On schemes currently under construction, nationally the number of homes fell by 21% in Q2 2026 compared to Q2 2025, with London experiencing a more substantial drop (27%) than the regions (19%).

Pipeline

This is continuing the trend of pipeline exhaustion, whereby completions exceed new starts on site and schemes coming through the planning system, despite an uplift in the number of schemes being approved. RE:UK explains this can be seen by the fact that for the tenth consecutive quarter, annual completions have exceeded starts.

The significant drop in the number of starts reflects the broader viability challenges that the BTR sector is increasingly facing and is contributing to the observed flight of investment to established BTR assets, as opposed to new development.

Avoid

RE:UK argues that the government needs to avoid creating future additional uncertainty, or making abrupt and unwelcome shifts in policy to prevent viability pressures worsening and cooling investment into new schemes. However, despite the decline in starts seen, BTR continues to hold its own in terms of overall delivery, accounting for nearly 1 in 10 new homes, says the body.

Director Danny Pinder says the delivery figures undoubtedly reflect the impact the viability crisis is having on the development of BTR schemes across the UK. “That the sharpest decline in starts is within the regions is yet further evidence of the fact that, in most parts of the country, it is now unviable to bring forward new schemes despite strong underlaying tenant demand,” he adds.

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