Research Letter – September 2024

In this letter, we examine the role of build-to-rent (“BTR”) in the UK’s housing market. The UK’s chronic inability to construct more housing has become one of the nation’s foremost issues in recent years.  Meanwhile, other countries like the US and Germany have a long-standing, mature multifamily industry and continue to add to their supply of BTR apartments. Why, then, after having been heralded as “only a matter of time” until BTR grows to US-levels of institutionalisation, has the UK only managed to build on average 10,000 units per year over the past decade?

This research letter examines the realities of developing BTR housing in the UK. Adopting an affordability-based approach, we show that a combination of space regulations, the high development costs of BTR and relatively low wages in the UK outside of London limit the addressable market of workers who could support the required rental levels. We also demonstrate how refurbishment-driven strategies, such as the one we developed through our housing platform, Ocasa could provide a more viable alternative. We conclude by positing that the government must prioritise scalable solutions and fundamentally rethink its role in promoting new housing as a form of public infrastructure if it wants to close the historic housing shortfall.