Build to rent to take 30% of rental market, says big lettings agency

Build-to-rent developments will eventually provide thirty percent of all homes within the private rented sector, it has been claimed.

Estate agency Savills has made the claim after revealing that landlords are selling homes to owner occupiers faster than they are buying from them, according to its new report which also reveals that 290,000 rental properties were sold out of the rental market between April 2021 to October 2024 - six percent of the PRS in England and Wales.

Using listings data from a property portal in combination with HM Land Registry sales data, Savills identified that last year, 5.4 homes were sold from landlords to owner occupiers for every one home bought by landlords from owner occupiers, a 5:1 ratio.

This was a much faster rate than in 2021, where the ratio was around 1:1.

'Professionalising'

The PRS is evolving as institutional landlords are professionalising the sector by delivering new high-quality homes and small landlords leave the market, it adds.

Landlords owning between five and 24 properties increased their share from 33% to 35% - an extra 153,700 homes - from 2018 to 2024. Meanwhile, the average number of properties per mortgaged landlord grew from 3.2 to 4.5, according to UK Finance.

Build to rent

Although the build-to-rent (BTR) market has delivered 130,000 new rental homes during that time, delivery can’t happen fast enough to replace lost supply and meet high levels of rental demand, reports Savills.

It says: “If the BTR market matures to become home to 30% of the PRS, which is more in line with other international markets, at current rates of delivery it will take 70 years. Increasing delivery to 60,000 homes per year would reduce this to around 20 years.”

With a lack of supply and elevated demand, the inevitable consequence is high rents that are growing strongly. However, this is a disincentive for tenants to move as rents nearly always grow more quickly for new lets over renewals; before the pandemic, about 30% of the rental market turned over each year but between April 2022 and 2025, this has hovered around 23%.