## Rising Costs and Regulation Threaten Build-to-Rent Viability

The UK’s Build-to-Rent (BtR) sector is facing significant viability challenges, according to the Association for Rental Living (ARL). The organisation has called on the government to take immediate action to support the sector, which is crucial for delivering professionally managed rental homes. ARL highlights that rising construction costs, increased interest rates, softer investment yields, and expanded planning obligations are collectively reducing development margins and deterring investment.

This warning follows the recent announcement that the John Lewis Partnership (JLP) has withdrawn from its BtR property business, a move described by ARL’s chief executive Brendan Geraghty as “deeply disappointing news and a real loss for consumers.” The withdrawal signals wider pressures on BtR investors and developers, raising concerns about the future supply of high-quality rental homes.

## Government Urged to Respond Following John Lewis Withdrawal

In an open letter to Housing Secretary Steve Reed, Chancellor Rachel Reeves, and other housing ministers, ARL emphasises the need for urgent government intervention. The letter states: “We write following the recent announcement of the withdrawal of the John Lewis Partnership (JLP) from its Build-to-Rent property business, calling upon the government to take sharp notice of this deeply disappointing news and take immediate action to support the UK Build-to-Rent sector.”

ARL stresses that the issue is not confined to one business model but is fundamentally about the viability of BtR projects. The organisation warns that without policy stability and clearer planning frameworks, institutional investors will continue to view BtR as a high-risk sector, potentially reallocating capital internationally or into other asset classes.

## Impact on Housing Delivery and Rental Supply

The letter outlines the consequences of continued viability pressures on BtR developments. ARL warns that “slower housing delivery, reduced rental supply, increased affordability pressure and greater reliance on short-term or lower-quality stock” are likely outcomes if the government does not intervene. This poses a risk to the private rented sector, which has already benefited from more than 146,000 professionally managed BtR homes across the UK.

For landlords and letting agents, this could mean fewer new rental homes entering the market, potentially increasing competition and rental costs. The sector’s ability to provide long-term, high-quality rental accommodation may be compromised, affecting tenants and landlords alike.

## Calls for Policy Stability and Planning Reform

Alongside financial pressures, ARL highlights the cumulative impact of regulatory changes and expanded Section 106 obligations on BtR viability. The letter calls for a more stable policy environment and clearer planning frameworks to support delivery and encourage investment. This aligns with recent appeals from the British Property Federation, which has urged the Chancellor to reinstate Multiple Dwellings Relief to unlock stalled BtR schemes.

Such measures could help restore investor confidence, ensuring that BtR continues to contribute to the supply of professionally managed rental homes in the UK.

## What This Means for UK Landlords and Agents

The viability challenges facing BtR developments have direct implications for landlords and letting agents operating within the private rented sector. Reduced investment in new BtR projects may limit the availability of purpose-built rental homes, potentially increasing demand and rental prices in other parts of the market. Agents may also see a shift in tenant demand as supply tightens.

Landlords should monitor government responses closely, as any policy changes could influence the broader rental market dynamics. Supporting initiatives that promote BtR growth could help maintain a diverse and sustainable rental housing supply.

Suggested internal link anchors
– Build-to-Rent developments
– Rental housing supply
– Private rented sector investment
– Planning obligations Section 106
– Institutional capital in property
– Multiple Dwellings Relief
– Housing delivery challenges
– Rental market affordability
– Build-to-Rent policy stability
– Professionally managed rental homes

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/