The UK’s Build-to-Rent (BTR) sector is showing signs of renewed confidence as investment activity gathers pace, according to new data from CBRE.
Investment volumes reached £581.2 million in Q3 2025, with a further £3.8 billion of transactions currently under offer — an increase of £1.6 billion from the previous quarter.
The real estate consultancy described the figures as evidence of “cautious optimism” returning to the market, as more investors re-engage and capital begins to flow back into large-scale residential rental schemes after a subdued first half of the year.
While total investment remains moderate compared to the sector’s 2021–2022 peaks, CBRE said the current trajectory suggests a measured rebound, led by institutional players seeking defensive, income-generating assets in the face of higher interest rates and macroeconomic uncertainty.
Multifamily leads, single-family stable
Multifamily BTR — large-scale apartment-style rental developments — was the main driver of Q3 investment, accounting for £334.6 million across three major transactions. That figure represents a 4% year-on-year dip, but still reflects strong relative performance given wider market headwinds.
Meanwhile, Single Family Housing (SFH) — low-rise suburban rental homes often built within master-planned communities — attracted £246.6 million, broadly in line with Q3 2024.
For 2025 as a whole, £2.3 billion has been invested in the BTR sector so far, mirroring last year’s pace. Within that total:
• £1.3 billion has gone into multifamily schemes (up 5% year-on-year)
• Just under £1 billion has been directed to single-family projects (down 12%)
As in 2024, much of the activity involved standing investments — completed and income-producing assets — rather than forward-funding new developments.
“A significant portion of properties currently under offer are existing buildings, which underscores the shortage of newly constructed BTR stock,” said Tom Sinclair, Executive Director at CBRE. “In the last quarter, we’ve observed increasing confidence among investors, demonstrated by the rise in both deals and market participation.”
CBRE’s figures point to a robust deal pipeline heading into the final quarter of 2025. Around £3.8 billion worth of transactions are currently under offer, with approximately 60% focused on multifamily assets.
Analysts say this reflects the institutional bias towards established urban rental stock, which offers scale, liquidity, and operational track records in key city markets.
Among the headline deals this quarter were:
• Greystar’s acquisition of Barking Wharf, a 595-home riverside build-to-rent community in east London; and
• A £145 million joint venture between JRL Group and Housing Growth Partnership to deliver a 414-home BTR scheme in Luton, a key commuter market north of London.
Together, these transactions highlight investor appetite for both urban regeneration schemes and emerging regional hubs with strong rental demand.
Investors look to 2026 with renewed appetite
The momentum seen in Q3 contrasts with the cautious sentiment of earlier this year, when higher financing costs, planning delays and construction inflation restrained development activity.
CBRE believes the sector’s fundamentals — chronic housing undersupply, institutional interest in residential assets, and steady tenant demand — continue to underpin its resilience.
With the Bank of England expected to begin easing rates in 2026, many investors see the next 12 months as a window to secure assets before valuations tighten again.
“Build-to-Rent remains a long-term growth story,” said one London-based institutional investor. “Income yields are strong, tenant retention is improving, and the demand for quality rental housing — particularly outside London — continues to outstrip supply.”
Sinclair added that BTR remains one of the UK’s most resilient property sectors, with continued evolution between the multifamily and single-family markets. “While challenges remain on the development side, investor confidence is clearly beginning to return,” he said.
