The Investment Property Forum’s Spring 2026 Residential Investor Sentiment Survey found that 43% of respondents expected to increase their allocation to multifamily BTR in London over the following 12 months, while more than half of those able to invest in single-family housing expected to increase their exposure in southern England. No respondent forecast a decline in rental values across either part of the market.

Yet the development figures, according to the Real Estate:UK’s Q1 2026 report, tell a much less comfortable story. Only 5,619 BTR homes started construction in the 12 months to the first quarter of 2026 (65% fewer than a year earlier) and the number under construction fell by 17%. At the same time, 68% of first-quarter investment went into operational assets.

This contrast defines the problem. Capital has not withdrawn from BTR; it is being invested at less risk-adverse stages of the development process. The task for policy makers is not simply to attract more money into the sector but to make it possible for more of that money to move upstream into planning, construction and delivery.

Capital and certainty

An occupied building offers measurable security in rents, demand, operating costs and resident behaviour. On the other hand, a development site only offers assumptions. Investors must price planning timescales, construction inflation, infrastructure availability, building safety approvals and the terms of a Section 106 agreement, often before several of those matters have been settled.

This does not mean investors have lost their appetite for development, but it means that open-ended risk is expensive. Each uncertain timescale adds contingency, alters the cost of finance and increases the return required to justify commitment. A scheme can better withstand a demanding planning obligation that is known early. What is harder to absorb is a requirement that changes late or a programme that slips without a reliable end date.

De-risking therefore does not have to mean public subsidy. In many cases, a dependable process is itself a financial intervention because it reduces the premium attached to uncertainty.

BTR can strengthen the delivery model

BTR should be treated as part of the housing delivery system rather than as a specialist investment product at its edge. Real Estate:UK’s figures show that it accounted for 8% of the new homes delivered in Great Britain in 2025 and its role can grow.

On a large mixed-tenure site, BTR can widen the available capital base and reduce reliance on the rate at which homes for sale can be absorbed. A completed rental phase can bring residents onto a site earlier, support local services and establish confidence in a new place while later phases are still being built.

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The long-term operating model also changes the development discipline. The owner has a direct interest in design quality, maintenance, energy performance, management costs and resident satisfaction over many years. From an operational perspective, those considerations should shape a scheme before planning submission, not be added once construction is under way.

That alignment between development and operation is one reason BTR can help to de-risk complex sites. It should not be seen as a substitute for market sale or affordable housing but as an additional tenure with a different funding and absorption profile.

Planning delay as a financial risk

The planning system remains one of the largest sources of avoidable risk. Recent research by Real Estate:UK found that a BTR scheme in London took an average of 15 months to secure planning permission in 2025 and only marginally less elsewhere in England, considerably in excess of the statutory period for a major application.

Complex schemes will not be determined overnight but indefinite timescales do little to instil investor confidence. The same applies to Section 106 negotiations: model clauses will not resolve every local issue, but more consistent treatment of viability reviews, affordable private rent and long-term management obligations would remove repeated negotiation over familiar points. Local plans can help by identifying where BTR is supported and how its distinct economics will be assessed.

Infrastructure commitments

A planning permission is worth very little if power, water, highways or public transport cannot support it. These constraints increasingly affect land value, funding conditions and construction programmes, yet they can emerge after substantial design and appraisal work has taken place.

Again, investors need certainty: credible information about capacity, planned reinforcement and timing. Housing growth strategies and infrastructure planning should therefore be considered together. Allocating land without a realistic route to utilities merely moves risk from the public plan into the private appraisal.

The same principle applies to building safety and other regulation. High standards are essential, but the route through approvals must be sufficiently clear for programmes and finance to be structured around it.

Moving capital back into delivery

Real Estate:UK analysis shows that the BTR pipeline now stands at roughly 303,000 homes, including completed schemes, construction and planning. That scale shows what the sector has achieved; on the other hand, the sharp fall in starts shows why the next phase cannot be taken for granted.

It’s not a simple fix, but resourcing planning authorities properly, making Section 106 and viability processes more consistent, aligning infrastructure programmes with housing allocations and giving long-term rental operators a stable regulatory framework could considerably lower risk. For our new government, these are among the issues that should be addressed.

BTR capital is available and the demand for professionally managed rental homes remains substantial, meaning that BTR has an important role to play in addressing the housing crisis. The measure of success is whether policy enables more investors to commit before a building is occupied, so that viable schemes move from consent to construction and from construction to homes.