The Build to Rent sector could deliver as much as one in 10 of the government’s planned 1.5 million new homes but only if ministers address what industry leaders describe as a growing viability crisis ahead of tomorrow’s Budget.
Justine Edmonds (main picture, inset), Head of Build to Rent and Leasing Strategies at LRG, says the sector’s ability to scale is being held back by fiscal uncertainty and rising development costs, with the Budget offering a critical opportunity to restore momentum.
The loss of Multiple Dwellings Relief (MDR) within Stamp Duty Land Tax last year is highlighted as the most pressing barrier to new supply.
Edmonds reckons the withdrawal of the relief rendered around 25,000 BTR homes unviable “almost overnight”, undermining schemes designed to deliver high-density housing. Reinstating MDR, she argued, would be the single most effective way to restart development pipelines.
EXTENDED SUPPORT
LRG is also calling for extended support on holding costs, including an increase in empty property business rates relief from six to twelve months and the removal of council tax on newly completed but unoccupied BTR homes.
The group says these adjustments would offer critical breathing space at a time when inflation and higher borrowing costs continue to squeeze projects.
Additional reform is sought on energy-efficiency investment. Edmonds says zero-rated VAT on energy-saving materials should be broadened to cover retrofit and refurbishment, noting that many BTR assets built a decade ago are now reaching the end of their initial investment cycle.
Extending the relief, she adds, would support reinvestment, improve building performance and help reduce tenants’ running costs while aligning with national sustainability targets.
BOOST INVESTOR CONFIDENCE
Despite strong underlying demand, the sector’s delivery has slowed markedly: only 2,600 BTR starts were recorded in the first half of this year, compared with 18,000 completions in 2024.
Edmonds says the issue is not appetite from renters, but investor confidence.
“The market remains strong in fundamentals but fragile in sentiment,” she warns, adding that stability and consistency must be prioritised over short-term measures.
She argues that if the government wants to meet its 1.5 million homes ambition, it must give BTR a clearer pathway through a supportive tax regime and continued planning reform.
With the right conditions, the sector could accelerate delivery, support regeneration and play a central role in driving housing-led economic growth.
