New research from Real Estate:UK (“RE:UK”), prepared by Savills, has highlighted the development issues impacting the Build-To-Rent (BTR) sector, with starts-on-site across the UK falling by 63% in Q3 2026 compared to Q3 2025 (4,696 new starts, down from 12,674 respectively).
Q3 2026 was the eleventh consecutive quarter where completions (21,979) exceeded starts-on-site as the pipeline of new homes for rent diminishes due to rising construction and financing costs, planning and regulatory delays and the cumulative impact of taxes and levies on development viability.
The impact of the viability challenges on future pipeline is also significant. While the numbers of consented units have increased slightly year-on-year, the number of schemes at detailed application stage has fallen by 9% since last quarter (Q3 2026 vs Q2 2026), which will impact longer-term supply.
The decline in the number of homes under construction combined with a higher than usual number of completions (21% higher in the twelve months to Q3 2026 than 2025; 21,979 vs 18,204), has seen the number of homes under construction fall by 30% nationally in the twelve months to September, with both London (down 28%) and the regions (down 30%) experiencing similar drops.
Growth in the regions has been hardest hit, with a 78% drop in new starts occurring in the regions over the same period.
This drop reflects viability pressures facing the sector, which have been compounded by political uncertainty on issues such as potential rent controls and a lack of political will to urgently address key sector challenges, including ongoing delays with the Building Safety Regulator and unnecessary costs arising from the “Register your rental property service” design.
At a time when financing costs are prohibitively high for Build to Rent development Real Estate:UK is calling on the government to kick-start development through targeted tax and regulatory measures at the upcoming Budget. The industry group argues that a number of cost-effective interventions, including restoring SDLT multiple dwellings relief for high-density housing and zero-rating VAT on rents, would address the viability issues, unlock investment and drive economic growth.
Despite the fall in new starts, BTR continues to play a key role in supporting the government’s ambitious housing delivery targets, accounting for nearly 1 in 10 new homes (8%). This highlights
both the vital contribution the tenure continues to make, and the extent to which viability pressures continue to plague the entire housing sector.
Moreover, investor appetite for Build to Rent remains, with capital continuing to target operational assets. In the Single Family Housing market, almost £300 million has also been committed to suburban development across five regions in England. This demonstrates the sector’s ability to attract long-term patient capital, although targeted public-sector support will be needed to unlock further development, particularly in the Multifamily market.
Danny Pinder, Director, Real Estate:UK, said: “The Q3 2026 delivery figures show the persistent and worrying decline in the number of new starts on site across the UK, and lay bare the extent to which the viability crisis is pushing development of homes for rent to breaking point. We are seeing wider commentary around developers withdrawing from London with today’s stats pointing to a more acute picture for delivery in the regions .
“Annual completions are up, which is positive, but if we can’t bring new supply into the pipeline quickly enough, we risk exacerbating the UK’s housing shortfall, with a significant impact likely to be felt down the line. The Government has moved to support the private for sale market with the reintroduction of a revised ‘Help to Buy’ scheme but we need all parts of the market firing on all cylinders to address the housing crisis, which means targeted intervention to ease the tax and regulatory burden that is stalling development of homes for rent."
