Letting agents urged to embrace Build To Rent amid sector challenges

Letting agents urged to embrace Build To Rent amid sector challenges

Letting agents face risks of losing business if they overlook the Build To Rent (BTR) sector, despite recent declines in new BTR developments. Industry experts highlight the need for specialised technology and operational adjustments to meet institutional landlord demands.

Letting agents are being warned they could miss out on substantial future instructions if they fail to engage with the Build To Rent sector, which has seen significant investment growth over the past decade but is currently experiencing development slowdowns. The sector’s distinct operational model requires letting agents to adopt integrated technology solutions and meet higher standards of consistency and transparency expected by institutional landlords.

Propoly, a PropTech company, reports that annual investment in Build To Rent rose from £2.3 billion in 2016 to £5.5 billion in 2025, with an additional £3.1 billion invested in the first half of 2026 alone. Despite this influx of capital, recent data from Savills reveals a sharp 79% decrease in BTR starts-on-site across the UK in the year to June 2026, with an 84% drop outside London. The number of homes under construction fell by 21% nationally in the second quarter of 2026 compared to the previous year, indicating significant challenges for new BTR developments.

Build To Rent demands new operational approaches from agents

Propoly’s chief executive Sim Sekhon emphasises that Build To Rent is not merely a larger version of traditional buy-to-let but an entirely different model. Institutional landlords in the BTR sector expect operational excellence, transparency, and consistency throughout the resident journey. This raises the bar for letting agents, who must implement technology capable of automating administrative tasks to manage growing portfolios without proportionally increasing staff numbers.

Such technology integration is crucial because the BTR model involves managing large-scale, professionally run rental communities rather than individual properties. Agents working in this space must provide seamless services, including efficient maintenance coordination, transparent rent collection, and clear communication channels, to meet the expectations of both landlords and tenants.

However, the sector’s current difficulties reflect broader viability issues. Savills’ research shows that for the tenth consecutive quarter, completions of BTR homes have exceeded new starts, indicating a shrinking pipeline of new developments. This trend is more pronounced outside London, where the fall in new starts is steepest. Experts suggest that investment is shifting away from new BTR developments towards established assets, which are perceived as lower risk amid economic uncertainties.

Implications for landlords and letting agents in the private rented sector

For landlords and agents, the evolving Build To Rent sector represents both an opportunity and a challenge. The scale and professionalism of BTR portfolios require agents to upgrade their operational capabilities, including adopting PropTech solutions tailored to large-scale property management. Agents who fail to adapt risk losing out on a growing segment of the rental market, especially as institutional investors continue to prioritise BTR assets.

Small portfolio landlords may see BTR as a competitor, given the sector’s ability to offer professionally managed, high-standard rental homes. However, the sector’s current slowdown in new developments could moderate competitive pressures in the short term. Agents servicing smaller landlords should nonetheless monitor BTR trends closely, as the sector’s growth and operational standards could influence broader market expectations and regulatory developments.

Letting agents should also consider the operational implications of BTR’s emphasis on transparency and resident experience. This includes ensuring compliance with evolving tenancy laws, safety regulations, and deposit handling requirements, which are increasingly scrutinised in large-scale rental operations. The sector’s institutional nature means that landlords and agents must maintain detailed records and evidence of compliance, which can be facilitated by digital management platforms.

What letting agents should consider amid Build To Rent sector shifts

• Assess current technology and administrative processes to identify gaps in handling large portfolios efficiently.
• Explore PropTech solutions that automate repetitive tasks and improve communication with landlords and tenants.
• Stay informed about regulatory changes affecting tenancy management, safety standards, and deposit protection relevant to BTR and the wider rental market.
• Engage with institutional landlords to understand their expectations and service requirements.
• Monitor BTR development trends and investment flows to anticipate shifts in market demand and competition.

Keeping your rental properties compliant with evolving sector demands

TLA membership offers practical compliance resources and support tailored to the challenges presented by the Build To Rent sector and large-scale property management. Through TLA’s developing property management platform ORBIT, currently in BETA testing, landlords and letting agents can organise portfolios, manage rental documents, and record key compliance actions efficiently. ORBIT’s features under test include tools to maintain evidence of safety checks, tenancy agreements, and communications, helping members meet the transparency and operational standards increasingly demanded in the rental sector.

Accessing TLA member compliance support and exploring ORBIT BETA access can assist letting agents in adapting to the Build To Rent model’s requirements. This includes managing documentation for multiple properties and landlords, monitoring regulatory developments, and preparing for new obligations under tenancy laws and safety regulations. TLA membership provides a practical framework to stay organised and compliant as the sector evolves.

Looking ahead, letting agents who invest in technology and compliance readiness will be better positioned to capitalise on the Build To Rent sector’s potential once development activity stabilises. The sector’s growth trajectory and institutional landlord expectations suggest that operational excellence will remain a priority for market participants.

Sources: Letting Agent Today