Build-to-rent developments are experiencing unprecedented growth in Australia, with 4,660 units delivered in 2024 and projections pointing to 6,000 new units in 2025. This represents a big shift from previous years, when the average annual delivery was less than 2,000 units.
What exactly is build-to-rent? This housing model, already well-established in the UK and USA, offers purpose-built rental accommodation professionally managed by a single owner. In fact, the build-to-rent sector in Australia is currently valued at $16.87 billion, though this represents just 0.2% of the total residential housing sector. The concept has gained particular traction in Queensland, where nearly one-third (31%) of households are renting, slightly above the Australian average of 30.6%.
Despite not currently providing affordable housing options, build-to-rent offers clear advantages for tenants. Residents benefit from security through long-term leases, professional property management, and access to attractive amenities like gyms, co-working spaces, and communal areas. Additionally, these developments are typically located near parks, shops, workplaces, and schools. However, the sector faces challenges with approximately 20,500 DA-approved units currently stalled, awaiting financial backing or policy clarity.
What is Build to Rent?
Build-to-rent (BTR) represents a fundamental shift in the UK housing market. Unlike traditional rental properties, BTR developments are explicitly purpose-built for renting rather than for sale. These developments are constructed with the renter’s experience as the primary focus, offering modern, high-quality living spaces that cater to tenants’ needs.
How Does it Differ From Traditional Renting?
The most significant distinction between BTR and traditional renting lies in the tenant experience. BTR complexes are created from the ground up with renters in mind, whereas traditional rental buildings are frequently converted from residences intended for ownership.
BTR developments typically feature extensive amenities that extend beyond necessities. Residents can access on-site gyms, co-working spaces, rooftop gardens, and concierge services. Furthermore, BTR emphasises community building through shared spaces and organised social events.
Lease flexibility represents another crucial difference. BTR developments offer longer-term tenancies with predictable rent increases, providing greater stability compared to traditional renting, where terms can vary widely depending on individual landlords.
Who Owns and Manages BTR Properties?
BTR properties are generally owned by institutional investors such as pension funds, insurance companies, and large property development firms. Prominent names in the sector include Greystar, Sigma Capital Group, Get Living, Fizzy Living, and Grainger, as well as household names like Legal & General, John Lewis, and Lloyds Bank.
Unlike traditional rentals managed by individual landlords or letting agencies, BTR developments feature professional on-site management teams. This approach ensures prompt maintenance, consistent service standards, and a hassle-free renting experience.
Where is Build to Rent Popular?
The BTR model is well-established in the United States (where it’s known as Multi-Family Housing) and has gained significant traction in the UK. According to the British Property Federation, there are now 263,694 BTR homes in the UK, with 92,140 complete, 59,043 under construction, and 112,511 in planning.
London remains the primary hub with 104,205 units, while the regions outside London contain 159,498 units. Beyond the capital, cities such as Manchester, Birmingham, and Leeds have become focal points for BTR projects. The sector continues to expand into suburban areas, responding to changing lifestyle preferences and work patterns.
Overall, BTR currently represents about 2% of the total private rented sector households in England, estimated at 4.6 million, signalling substantial room for growth in this emerging housing model.
Why Build to Rent is Gaining popularity in the UK?
The UK property landscape is experiencing a substantial shift as Build to Rent (BTR) gains momentum across the country. A number of interrelated factors that represent shifting housing needs and preferences are responsible for this growth.
Rising Demand For Rental Housing
The UK faces a significant housing shortage, with estimates suggesting the need for between 232,000 and 300,000 new units annually—a target that hasn’t been achieved since the late 1970s. Consequently, the BTR pipeline has expanded to 286,936 homes either in planning, under construction, or completed. Investment in the sector exceeded £5 billion for the first time in 2025, with single-family housing securing £1.8 billion for nearly 6,000 homes.
This growth partly stems from practical constraints. Housing affordability remains a key issue, particularly in high-demand areas like London and the South East. As mortgage rates fluctuate and property prices increase, many people find themselves unable to enter the housing market, turning instead to rental options.
Shift Towards Long-Term Renting
The rental market is evolving beyond short-term solutions. First-time homebuyers are getting older on average, which suggests that patterns of property ownership are changing. Households aged 35-44 have seen a notable increase in private rented accommodation, from 17% in 2009/2010 to 26% in 2019/2020.
Economic factors also contribute to this trend. The BTR sector’s stability during economic uncertainty makes it increasingly attractive for investors and tenants alike. Capital investment continues to flow into BTR without signs of slowing, demonstrating confidence in its long-term viability.
Appeal to Young Professionals and Families
BTR developments attract diverse demographic groups. Predominantly, tenants are between 25 and 34 years old, representing 51% of multi-family housing residents. Nevertheless, there’s growing interest from the 35-44 age bracket seeking larger properties in suburban locations.
Modern BTR schemes cater to evolving lifestyle needs. Post-pandemic priorities have shifted toward homes with outdoor spaces, dedicated workspaces, and amenities supporting well-being. Notably, 82% of schemes include social events, 78% offer shared gardens or roof terraces, and 76% allow pets—features particularly valued by young professionals and families alike.
Benefits of Build to Rent for Tenants
Build-to-rent developments offer tenants a fresh approach to renting, turning traditional landlord-tenant relationships into customer-focused services. These properties deliver numerous advantages that address common renting frustrations while enhancing overall living experiences.
Long-Term Leases and Security
Build-to-rent properties typically provide tenancies lasting three years or longer with planned rent increases, offering stability that traditional renting often lacks. This security allows tenants to build meaningful connections with local communities, plan long-term, and remove the uncertainty often associated with private landlords. Indeed, 40% of tenants prefer build-to-rent over dealing with private landlords or letting agents.
On-Site Amenities and Services
Beyond basic accommodation, build-to-rent developments feature extensive lifestyle facilities. Most properties provide gyms, swimming pools, communal lounges, rooftop gardens, cinema rooms, and concierge services. Additionally, many include co-working spaces, reflecting the shift towards hybrid working. These shared facilities create extended living spaces and foster community amongst residents, with 82% of schemes organising social events.
Professional Property Management
Build-to-Rent developments employ dedicated management teams responsible for day-to-day maintenance and repairs, ensuring issues are resolved promptly. This professional approach means buildings are maintained to higher standards, as owners anticipate long-term responsibility. Moreover, property managers with multiple buildings can negotiate better maintenance deals, benefiting tenants through timely repairs.
Pet-Friendly and Customisable Homes
Unlike traditional rentals, Build to Rent properties often welcome pets, recognising them as family members. At developments like Essential Living, all apartments are pet-friendly with no hidden restrictions or fees. Furthermore, tenants typically enjoy greater flexibility in personalising their spaces, including making aesthetic changes such as painting walls and creating truly customised homes.
Challenges and The Role of Government
Despite growing demand, the Build to Rent sector faces significant hurdles that impact its expansion across the UK property market.
High Construction and Financing Costs
Soaring construction costs, driven primarily by inflation, labour shortages, and supply chain disruptions, have constrained BTR growth. In London alone, construction fell by 11% last year. Simultaneously, high interest rates make debt funding less attractive, reducing available capital for new developments. This financing challenge particularly affects smaller housebuilders who face difficult financial conditions.
Tax and Regulatory Hurdles
The recent abolition of Multiple Dwellings Relief on stamp duty—originally designed to boost institutional investment—has created unexpected obstacles. BTR arrangements often face irrecoverable VAT costs that stick with landlords rather than end-consumers. Furthermore, planning delays and competition for land in urban areas remain persistent barriers.
Government Incentives and Pilot Schemes
To address these challenges, the government has introduced several measures, including guaranteeing more lending to encourage housebuilding. The government has previously given 54 local councils £68 million to unlock brownfield sites for construction. Additionally, a New Homes Accelerator group has been launched to unblock thousands of new homes stuck in planning systems.
Calls for National Policy Consistency
The sector urgently needs clearer national policy support. The absence of a consistent BTR definition has led to disjointed application of policy frameworks. Many suggest introducing a dedicated planning use class for BTR, which could help local authorities better support such schemes.
Conclusion – Build to Rent
Build-to-rent represents a significant evolution in the UK housing market, addressing many traditional renting pain points while offering a more customer-focused approach. The sector continues to expand beyond major cities like London, Manchester, and Birmingham into suburban areas, meeting the changing needs of modern renters. Though currently representing only about 2% of the private rented sector in England, BTR demonstrates substantial growth potential.
Several factors drive this expansion, particularly the widening gap between housing demand and supply, alongside shifting attitudes toward long-term renting. Young professionals value the flexibility and amenities these developments provide, while families appreciate the stability of longer tenancies and pet-friendly policies. Professional management teams ensure prompt maintenance and repairs, creating a hassle-free living experience that stands in stark contrast to experiences with some private landlords.
Despite these advantages, BTR faces considerable challenges. Construction costs, financing hurdles, and inconsistent regulatory frameworks currently limit faster growth. The government has taken steps to address these issues through lending guarantees and brownfield site development funding. Nevertheless, stakeholders call for clearer national policies and potentially a dedicated planning use class for BTR developments.
Looking ahead, the success of this housing model depends on balancing tenant needs with investor returns. BTR developments must remain accessible while maintaining the quality and amenities that differentiate them from traditional rentals. As work patterns and lifestyle preferences continue to evolve post-pandemic, BTR developments that offer outdoor spaces, dedicated workspaces and community-building opportunities will likely see the greatest demand.
The Build to Rent sector undoubtedly offers a promising alternative for UK property seekers. Although not yet providing broadly affordable housing options, BTR developments deliver security, quality, and convenience that many renters previously found elusive. This housing model appears poised to become an increasingly important component of the UK property landscape, especially as home ownership remains out of reach for many Britons.
What is Build to Rent, and how does it differ from traditional renting?
Build to Rent refers to purpose-built rental properties professionally managed by a single owner. Unlike traditional rentals, these developments offer longer-term leases, on-site amenities, and a focus on community building. They are designed specifically for renters, providing a more stable and convenient living experience.
Are build-to-rent properties more expensive than traditional rentals?
Build-to-rent properties typically command higher rents, often 15% to 20% above the median asking rent for the area. However, this premium often includes access to additional amenities, professional management, and longer-term lease security that may not be available with traditional rentals.
How long are typical lease terms in Build to Rent properties?
Build-to-Rent properties generally offer longer-term leases, often three years or more, with predictable rent increases. This provides greater stability compared to traditional rentals, allowing tenants to settle into their homes and communities for extended periods.
Who manages build-to-rent properties?
Build-to-rent properties are typically owned by institutional investors such as pension funds or large property development firms. They are managed by professional on-site teams responsible for day-to-day maintenance, repairs, and tenant services. This approach ensures consistent service standards and a more streamlined renting experience compared to individual landlords.