Built-to-Rent has gained popularity as a core pillar of the housing system and a thriving real estate ecosystem since it was first introduced in the UK back in 2012, as a response by the government to the Montague Review that year, which identified significant potential for investment in developing new homes exclusively for the rental market.
Designed exclusively for renters and professionally managed, BTR schemes focus on service, consistency, community, and long-term liveability. 2025 has proven to be a successful year for the scheme, with the UK’s total BTR pipeline surpassing 300,000 homes, with 141,839 operational homes, 55,361 under construction, and 113,400 with planning permission, a notable increase from the 100,000 referenced just two years ago, according to Knight Frank’s Q2 2025 BTR market update.
Along with the growth, this changes what tenants expect. Today’s renters want stability, energy-efficient solutions, community-focused amenities, and functional interiors, as well as professional services to help them keep up with their busy lives.
What is Build-to-Rent (BTR)?
Imagine a living facility where all the facilities are available, from recreational facilities like gyms, shared gardens, swimming pools, and lounges to social spaces like co-working environments and cinemas, premium security and of course, the living quarters that are designed to elevate everyday living. Build-to-Rent schemes are specifically designed for renting and offer high-spec modern homes, attractive rental terms, professional services, and excellent communal facilities.
Some of the key features that set them apart from PRS or traditional lettings are:
- Professional on-site management
- High-spec interiors with durable finishes
- A strong community space and amenities
- ESG prioritised living
These are some common feature trends in BTR schemes, which improve tenant satisfaction, faster lettings, and reduced void periods compared to traditional units.
What Does the Current UK BTR Market Look Like?
Investment momentum has remained strong, with the UK’s BTR market projected to see a record £6 billion investment in 2025, which, as per Knight Frank data from the Q3 2025 report, stands at a staggering £3 billion. It demonstrates the sector’s resilience and growing appeal to institutional investors, despite economic challenges.
Chart 1: UK BTR Investment Volumes (2023-2025)
| Year | Investment Volume | Key Notes |
| 2023 | £1.9 billion | Record year for Single-Family Rental, as per LSH Report 2025 and various market data |
| 2024 | £5.2 billion | Record-breaking year for the sector (LSH report 2025) |
| Q1–Q3 2025 | 3.05 | Q1–Q3 as reported by market research from Knight Frank BTR Market Update Q3 2025. |
Source: Lambert Smith Hampton Research, 2025, Knight Frank, Q3 2025
While London and Greater Manchester continue to account for two-thirds of existing BTR stock, regional markets are now taking centre stage, with nearly 60% of the units under construction located outside these historic strongholds. Knight Frank data suggests nearly two-thirds of UK local authorities (59%) now have at least one BTR scheme either operational or under construction, confirming the key role that BTR is playing in UK-wide housing delivery.
Birmingham leads this regional surge and is now recognised as the fastest-growing BTR market outside London, with more than 16,000 units either in planning or development. Other key regional cities experiencing significant BTR growth include Manchester, Leeds, Sheffield, Bristol, and Glasgow.
Chart 2: Top UK BTR Markets (Operational & Pipeline Units)
| City | BTR Status | Pipeline (Estimation) | Key Notes |
| London | 57,779 units operational | 80,000 | Largest single BTR market in the UK. |
| Manchester & Salford | 13,139 operational (Manchester city & neighbouring areas) | 18,000 | Manchester/Salford remains the largest regional BTR market outside London. |
| Birmingham | 7,155 operational units | 16,635 | Fastest-growing regional BTR market |
| Glasgow | 2,184 (approx.) | 8,000 | Expanding city and a surge of co-living spaces |
| Leeds | 4,301 | 10,935 | Yorkshire’s largest BTR hub |
Sources: Lambert Smith Hampton, Knight Frank, JLL Research 2025, Bidwells 2024
A notable development in the sector is the emergence of Single Family Rental (SFR), which attracted 38% of total BTR investment in 2023-24, representing a significant shift from the apartment-focused BTR schemes that dominated the sector’s early years. Additionally, co-living now accounts for 15% of the development pipeline, with 46% of all consented and under-construction co-living schemes located outside London.
What Factors Drive BTR Growth in the UK?
The meteoric rise of the BTR sector can be linked to three pillars of growth:
1. Economic Factors:
Elevated mortgage rates and the disparity between income and house prices. All local authorities in London registered a drop in first-time buyer mortgages per 1,000 dwellings between 2013 and 2023, with similar trends seen in other major cities across the UK. In Manchester, the number of first-time buyer mortgages per 1,000 dwellings fell 16.9% between 2013 and 2023, while it decreased by 12.7% in Birmingham and by 3.2% in Leeds. Currently, BTR accounts for 2% of the UK PRS, with higher percentages in urban areas, but this represents significant room for growth. The BTR sector has the potential to account for at least 30% of all privately renting households across the UK at maturity, which equates to approximately 1.9 million purpose-built rental homes.
2. Demographic Trends & Housing Supply Challenges:
To meet the housing needs of expanding cities across the UK, ambitious targets have been set, yet the revised National Planning Policy Framework increased housing targets for many Local Authorities, increasing the pressure to grant planning consents and boost housing delivery. BTR has become a crucial component of housing strategies for many Local Authorities, driving urban regeneration and supporting new transport infrastructure.
3. Lifestyle Parameters:
BTR has proved to perform better than the wider PRS and BTL sectors in areas such as rental stability, build quality of houses, energy efficiency and standard of accommodation. The availability of more shared amenities and resident facilities, such as 24-hour customer service via dedicated apps and social events that foster community spirit, has added to the appeal of BTR for tenants. The willingness of dwellers to relocate reflects their preference for BTR over other rental living options. While the median distance of movers to BTR in the UK is 5.8 miles, new-build BTLs are 39% less at 4.2 miles and almost half for the PRS at 3 miles.
How Have Investors Benefited From BTR?
While BTR has proved to be a silver lining for the UK’s housing shortage, investors have capitalised on strong rental dynamics. Average rents in Leeds have risen more than 30% over the past five years, while Birmingham is forecast at 18.8% rental growth over 2025-29, matching Manchester.
As a purpose-built rental solution, investors can rely on high occupancy rates that drive consistent rental income. Professionally managed properties that are tailored to resident needs often command premium rents with the potential for future growth. According to research, strategically placed BTRs in sought-after locations continue to provide impressive yields compared to the local PRS.
The trading of stabilised multifamily assets has become a significant feature of the market, with stabilised assets representing 48% of Q1 2025 multifamily investment volume, a sharp rise from 27% in 2024 and well above the five-year average of 15%, as per the LSH report. This demonstrates the sector’s maturity, with institutional investors now able to acquire operational schemes with proven track records.
Source: LSH Build To Rent Report, 2025
Future Outlook & Emerging Trends for BTR
The future of BTR looks remarkably robust, with significant growth potential across the UK, with the number of completed units in the UK passing the 130,000 mark in Q1 2025. Major boroughs such as Brent and Newham are catalysing growth around key locations like Wembley Park and Stratford. While the outlook remains positive, the LSH BTR Report 2025 notes that planning, funding and development pressures may influence the pace of future deliveries, meaning continued collaboration across the sector will be important for meeting long-term housing goals.
It is not just the volume of residences that developers need to focus on, as residents are vocal about the quality of homes they choose to reside in. Community is central to BTR, with young renters aged 25-44 constituting nearly 80% of total tenancies; additionally, younger Gen Z and millennial renters are more environmentally conscious and prioritise people-first design and building practices in their living spaces.
BTR Growth Highlights:
- More than 130,000 BTR units in the UK
- Manchester & Salford have built 21,654 units
- Operational stock levels across the UK’s Big Six cities now stand at around 34,000 units, an 18% increase in a single year
- Co-living accounts for 15% of the development pipeline
- Market research from Knight Frank BTR Market Update Q3 2025 reports an estimated investment of £3.05 in Q1–Q3.
The growth of BTR sector beyond London represents that professionally managed rental housing with people-first design and community living is a rental necessity across the UK.
Instyle Direct: Your BTR Interior Partner
At InStyle Direct, we provide affordable, flexible, and tenant-ready BTR furnishing solutions that balance people-first designs with strong investment returns, backed by our two decades of furnishing expertise and successful collaboration with leading BTR operators across the UK, Europe, and the UAE. Along with our budget-friendly turnkey solutions, our design philosophy hinges upon people-first designs with unmatched flexibility. Our goal is to simplify BTR projects and ensure the same with an in-house fleet and minimum subcontracting for high-quality services and clear communication, professional installation teams, and comprehensive warehousing capabilities to support phase-drop logistics, so whether you are fitting a unit of 10 or rolling out hundreds of units, we ensure your BTR development is market-ready and on schedule. Our ESG efforts extend to responsibly sourcing products, reducing paper consumption, recycling furniture, packaging and materials, and promoting ethical work practices.
Speak to our team today, or visit our BTR services and learn how we help your BTR development with our wide range of services dedicated and tailored to your specific needs.
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