The Mayor of London and ministers must intervene to stop the collapse of Build-to- Rent (BTR) properties across the capital, business groups have warned.
By Kumail Jaffer, Local Democracy Reporter
The Mayor of London and ministers must intervene to stop the collapse of Build-to- Rent (BTR) properties across the capital, business groups have warned.
New analysis seen by the Local Democracy Reporting Service (LDRS) shows that the number of BTR homes under construction has fallen by almost a third in the last year alone, from 17,138 in Q1 of 2025 to 12,134 in the first three months of this year.
BusinessLDN, Real Estate: UK, the Association for Rental Living and PriceHubble have now called on City Hall to ensure the impending new London Plan – the Mayor’s planning and development document – provides firmer direction on BTR properties for London’s boroughs.
The analysis found that 38.8 per cent of the dedicated rental properties surveyed in London provide homes at either the Discounted Market Rent (DMR) – rents set at least 35 per cent below local market levels – or the London Living Rent, which is set at one-third of local incomes.
However, developers of this nature are not eligible for government funding under the new emergency housebuilding measures introduced earlier this year as they do not offer social housing. BusinessLDN are recommending that the London Plan’s affordable housing requirements for BtR developments are brought in line with the thresholds for those benefiting from the new fast-track route.
The groups have also called on ministers to pause the implementation of the Building Safety Levy – a tax on new developments to help remediate historic building safety defects – from October, and to ensure the Building Safety Regulator (BSR) continues to process applications more efficiently.
Stephanie Pollitt, Programme Director for Housing at BusinessLDN, said: “Build-to-Rent homes have a crucial role to play in tackling London’s housing crisis, so a slump in supply should serve as a wake-up call for all levels of government.
“The current review of the London Plan is a crucial opportunity to level the playing field between for-sale housing developments and build-to-rent projects excluded from City Hall’s new emergency fast-track route.
“We also need to see wider action to kickstart the entire market to accelerate housebuilding across all tenures.”
Kate Butler, Assistant Director of Policy at Real Estate: UK, said: “Build-to-Rent has a crucial role to play in not only helping London to deliver the new homes the city so desperately needs at a pace and scale, but in providing a rental offer which actively aligns with the overarching need of business to attract and retain a dynamic workforce to support the capital’s continued economic growth.
“However, despite the clear benefits to London’s economy, and its role in solving the capital’s housing crisis, BTR has continued to face significant delivery headwinds, including viability challenges and regulatory delays. This has been compounded of late by the chilling effect continued speculation around the introduction of rent controls in the private rented sector is having on BTR investor sentiment, and in addition to measures to improve deliverability for BTR, we would urge the government to continue to rule out the introduction of any measures which would further undermine this critical housing tenure.”
The groups say that without significant reforms, City Hall will continue to struggle to hit its housebuilding targets as developers struggle with financially unviable schemes.
A spokesperson for the Mayor of London said: “Housing is a top priority for the Mayor and the Towards a New London Plan consultation last year recognised the important role Build to Rent can play in boosting delivery. Responses to the consultation are helping to shape the next London Plan, which will go out for further consultation over the summer.
“Build to Rent has an important role to play in delivering more homes for Londoners, and we are working with partners to ensure planning policy supports the right mix of development across the capital. Any public support must meet clear affordability rules to ensure homes are genuinely affordable for Londoners, as we build a more prosperous London for everyone.”
A spokesperson for the Ministry of Housing, Communities and Local Government (MHCLG) added: “The Building Safety Levy will help raise funds to ensure homes are safe.
“We delayed the implementation last year to give developers more time to prepare, while also reducing BSR delays – with new build approvals rising by 40% between February and April.”
