• The number of completed BTR units in the UK has continued to rise at a brisk pace, passing the 160,000 mark in Q1 2026.
• However, a slowdown in construction starts points to a potential easing of multifamily (MFH) supply growth over the next two to three years.
• BTR investment reached a near-record £5.2bn in 2025, partly boosted by the increased trading of stabilised assets.
• The single-family rental (SFR) sector continues to command a growing share of the market, accounting for 51% of all BTR investment over the last 12 months.

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While the UK’s build-to-rent (BTR) sector has maintained its growth over the last year, Lambert Smith Hampton’s new Build to Rent Report, Live & Kicking finds that activity within the sector is being reshaped by regulatory, cost and funding pressures. These have pushed investors and developers towards parts of the market where viability is strongest, including the rapidly maturing SFR sector.

Recent investment activity underscores recent shifts in focus within the UK BTR market. While volume of £5.2bn in 2025 was only very slightly down on 2024’s all-time high, the increased trading of SFR assets and stabilised MFH schemes counterbalanced the more subdued forward funding of MFH developments. In the 12 months to Q1 2026, SFR accounted for a record 51% of all BTR investment.

The emerging co-living segment is another key growth area within the BTR market, with the number of units in the co-living pipeline rising by nearly 50% over the last year. This form of housing has growing appeal to young professionals seeking budget-friendly flexible homes in urban locations; while its potential to deliver units at higher density is attractive to investors.

Viability concerns are also contributing to a move towards amenity-light multifamily schemes that prioritise essential services and affordability over luxury facilities. Such schemes generally have lower OpEx than higher-end BTR, which gives them significant appeal to operators increasingly concerned by cost pressures.

Regulatory issues are additionally reshaping the BTR sector, with the recently implemented Renters’ Rights Act adding to challenges created by the Building Safety Act and the ‘Gateway’ planning process. However, the LSH report argues that BTR owners should be better placed to adapt to the challenges created by the Renters’ Right Act than many less well-prepared private landlords. 

Scotland is the one part of the UK where regulatory clarity has improved markedly in recent months, with BTR confirmed to be exempt from rental controls included in the Housing (Scotland) Act 2025. Uncertainty in the lead-up to the passing of the Act has created a major blockage to Scottish BTR development in recent years, but developers and investors may now be encouraged to move forward with stalled pipeline schemes.

Ezra Nahome, CEO, Lambert Smith Hampton said: “LSH continues to see strong interest from investors and developers seeking varied opportunities across the BTR market, despite recent challenges and an uncertain economic backdrop. UK BTR is an increasingly mature and diverse sector that now encompasses multiple styles of housing in both urban and suburban locations, providing homes to renters with a wide range of demographic profiles.”

Elle Gray, Director – Living Capital Markets commented: “Investor competition for stabilised assets will intensify, partly due to ongoing viability challenges for new development. In this context, assets providing day-one income are increasingly attractive, particularly where they offer secure cash flow and limited execution risk. Current market conditions are creating attractive entry points for well‑located, high‑quality stabilised assets, with guide prices that reflect both short‑term uncertainty and long‑term fundamentals.”

Shaan Makwana, Director – Living Capital Markets added: “The SFR sector is now firmly established as a core part of the UK BTR market, and its momentum will continue to build on the back of record investment over the last 12 months. As the sector matures, data is improving and benchmarking is becoming more robust, which will give new entrants increased confidence to deploy capital while also encouraging housebuilders to further integrate SFR into their delivery strategies.”

Download the 2026 Build to Rent report in full here →