Lambert Smith Hampton’s latest BTR Report highlights the sector’s maturity, regional growth, and investor appetite for diversified assets.

• Record-Breaking Investment Forecast: The UK BTR sector is projected to attract £6bn in investment in 2025 – the highest annual total to date
• Regional Market Growth: Nearly 60% of all BTR units under construction are outside London & Greater Manchester with Birmingham emerging as the fastest growing regional market
• Sector Diversification Accelerates: Single-family rental (SFR) and co-living now make up significant share of the pipeline, signalling a more diverse and resilient BTR market.

Download the 2025 Build to Rent report in full here →

The UK’s Build-to-Rent (BTR) sector is poised to attract a record-breaking £6 billion in investment in 2025, according to “Built to Last”, the new BTR market report by Lambert Smith Hampton (LSH). This surge in activity comes despite ongoing economic and geopolitical headwinds, reflecting the sector’s growing resilience, diversification, and appeal to institutional investors.

The number of operational BTR units has more than doubled in the past four years, surpassing 130,000 in Q1 2025. The pipeline remains robust, with over 56,500 units currently under construction and a further 126,000 in planning.

A key driver of this momentum is the continued expansion and diversification of the sector. The rise of single-family rental (SFR) and co-living schemes has broadened the appeal of BTR beyond its traditional base of young, urban renters. These emerging sub-sectors are helping the market mature and meet the evolving needs of renters across the UK.

Regional Cities Fuel Market Expansion

While London and Greater Manchester continue to account for two-thirds of existing BTR stock, regional markets are taking centre stage. Nearly 60% of units under construction are located outside these historic strongholds, underscoring the depth of activity across the UK.

Birmingham leads this regional surge, now recognised as the fastest-growing BTR market outside London. Over 16,000 units are either under construction or have received planning consent, with stock in the city increasing by 29% in 2024. Notable developments opened last year include Moda’s Loudon’s Yard (398 units) and Cortland’s Broad Street (440 units).

Co-living is also gaining traction across the UK. Now accounting for 15% of the development pipeline, the model is extending beyond the capital. Regional cities now host 40% of operational co-living beds, driven by landmark openings in Manchester, with nearly half (46%) of all consented and under-construction co-living schemes located outside London.

SFR Momentum Continues

The SFR sector also continues to outperform, with £1.9 billion invested in both 2023 and 2024, more than eight times the five-year average. While SFR currently comprises just 10% of operational BTR stock, it attracted 38% of total investment in 2023–24. This figure is expected to remain elevated, as expanding investment platforms acquire more units for their SFR portfolios.

Stabilised Asset Trading Reaches New Highs

The trading of stabilised multifamily assets has become a significant feature of the market. In Q1 2025 alone, BTR investment reached £1.1 billion, following a record £5.2 billion in 2024. Stabilised assets represented 48% of Q1 multifamily investment volume, a sharp rise from 27% in 2024 and well above the five-year average of 15%.

Major transactions included Ridgeback’s £126 million acquisition of Equipment Works in Walthamstow and the joint purchase of Birmingham’s Allegro by QuadReal and Realstar for approximately £115 million.

Rental Growth Outlook

Rental growth is expected to rebound in 2025 after a cooling in 2024, with rents forecast to rise 4.5% by year-end and sustain a long-term average of 4.0% annually. These projections, provided by Hamptons, reflect continued undersupply and expected impacts from legislative changes, including the forthcoming 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. Amid wider economic uncertainty, the sector is evolving into a mature and diversified investment class, with rising activity outside of London, continued demand for SFR, and increased trading of stabilised multifamily assets.  

“As many of the assets developed over the past decade begin to change hands, we expect a sustained trend towards forward purchases and operational transactions, underpinned by the strength of institutional capital and a maturing market landscape.”

Download the 2025 Build to Rent report in full here →