Investment in the UK’s Build to Rent (BTR) sector surged to over £800 million in the first quarter of 2025, marking the strongest Q1 performance since 2022, according to new data from Savills.
The figures follow a record-breaking fourth quarter in 2024 and highlight growing momentum in a sector that continues to attract increasing investor interest.
Savills reported that more than £500 million of this Q1 investment was directed towards the development of large-scale, multi-family schemes in urban areas — a reversal of recent trends that saw reduced activity in forward funding deals. The agency also noted that, for the fourth consecutive quarter, international capital outpaced domestic sources, as overseas investors continue to target the UK’s private rental sector amid ongoing supply shortages, affordability challenges, and long-term demand for high-quality rental homes.
Among the quarter’s most notable transactions was a forward funding deal between Hill & Peabody and Goodstone in Dagenham. Another major development was Legal & General’s partnership with Japanese developer Nomura to deliver more than 1,000 rental homes across the UK. Their joint venture acquired a plot in Herne Hill, Lambeth, where over 200 new homes will be developed. Meanwhile, CompassRock entered the Bristol market with the acquisition of 295 apartments at Stafford Yard — the city’s first BTR deal since 2002.
According to Savills, 18,000 Build to Rent homes were completed across England and Wales in 2024, making up 8% of total new-build completions — a significant increase from 5% in 2019. Despite this progress, BTR still represents just 2% of the UK’s overall private rented sector. The figure is far below penetration levels in the United States, where Build to Rent accounts for 43% of private rented homes in Detroit and a striking 74% in Charleston. Even in Manchester, one of the UK’s leading BTR markets, the share stands at 25%.
A spokesperson for Savills said the outlook for the remainder of 2025 remains strong, as demand for rental accommodation continues to outpace supply.
“With over £800 million invested in Q1 this year, following a record-breaking Q4, and growing demand for high-quality rental homes amid limited supply, the sector is seeing continued growth,” the spokesperson said. “It’s great to see so many forward funding transactions in a single quarter — a testament to ongoing investor interest in delivering new, high-quality homes across the UK.”
Savills expects this trend to persist throughout the year, with both multi-family and single-family developments driving further expansion. As rising mortgage costs and affordability constraints push more households into the rental market, BTR continues to prove itself as a resilient and increasingly vital segment of the UK housing landscape.
