Unlocking £300 Billion for the UK: The Build to Rent Opportunity

By Brendan Geraghty, CEO, Association for Rental Living

The UK’s Build to Rent (BTR) sector presents a transformative opportunity to address the nation’s housing shortage and stimulate economic growth. According to Savills, an estimated £300 billion in investment is required to meet future rental housing demand, potentially delivering over 2 million additional homes across various rental tenures.

Housing as a Pillar of the Modern Industrial Strategy

The Government’s “Invest 2035” modern industrial strategy underscores housing as a critical component for economic development. It emphasizes that adequate housing is essential to accommodate a growing workforce and to support the expansion of high-growth sectors . By integrating housing into the broader economic framework, the strategy aims to create sustainable communities that bolster productivity and innovation.

Accelerating Investment and Housing Delivery

To expedite the realisation of  an estimated £300bn in investment and up to 2 million homes supply opportunity, coordinated efforts between the government and the BTR sector are essential.

The Association for Rental Living – the membership body for all institutionally backed, professionally managed purpose-built rental living sectors in the UK – explores five key strategies to support and accelerate the growth and reach of BTR.

1. Enhance Financial Support Mechanisms

The Government has introduced a £3bn support package, including housing guarantee schemes, to provide lower-cost loans for developers . Expanding these financial instruments can attract more investors and facilitate large-scale BTR projects.

2. Streamline Planning Processes

Reforming the planning system to reduce delays is crucial. Proposals include simplifying approval processes and granting more authority to specialised planners, which can accelerate project timelines and reduce costs. Specific training on Build to Rent, in all its forms, as part of mandatory training for planning committees and certain mayoral planning functions, as proposed, is also welcome. 

3. Promote Modern Methods of Construction (MMC)

Adopting MMC, such as modular construction and off-site manufacturing, can significantly reduce construction time and costs. These methods also improve build quality and sustainability, aligning with the goals of the industrial strategy .

4. Foster Public-Private Partnerships

Collaborations between government entities and private developers can leverage resources and expertise. Initiatives like the MADE Partnership, involving Barratt and Lloyds Banking Group, exemplify how joint ventures can drive large-scale housing developments. 

5. Implement Tax Incentives

Offering tax incentives to BTR investors can enhance the sector’s attractiveness. Such measures could include tax reliefs similar to the Enterprise Investment Scheme, encouraging investment in affordable rental housing.

By aligning housing development with the modern industrial strategy, the UK can address its housing crisis while stimulating economic growth. Through financial support, planning reforms, modern construction techniques, public-private partnerships, and tax incentives, the Government and industry can collaboratively realise the potential of the BTR sector, delivering millions of homes and substantial economic benefits.