Business groups have warned that the Mayor of London and government ministers must intervene to prevent the collapse of Build-to-Rent (BTR) properties across the capital. New analysis seen by the Local Democracy Reporting Service (LDRS) reveals that the number of BTR homes under construction has fallen by almost a third in the last year alone, from 17,138 in the first quarter of 2025 to 12,134 in the first three months of this year.
Call for Action on London Plan
BusinessLDN, Real Estate: UK, the Association for Rental Living, and PriceHubble have jointly called on City Hall to ensure that the impending new London Plan—the Mayor's planning and development document—provides firmer direction on BTR properties for London's boroughs. They also requested that City Hall adjust emergency housebuilding measures introduced this year to include BTR developers among the beneficiaries of grant funding.
Affordable Housing Gap
The analysis found that 38.8 per cent of the dedicated rental properties surveyed in London offer homes at either the Discounted Market Rent (DMR)—rents set at least 35 per cent below local market levels—or the London Living Rent, which is set at one-third of local incomes. However, developers of these properties are not eligible for government funding under the emergency measures because they do not provide social or affordable housing.
The groups have also urged ministers to pause the implementation of the Building Safety Levy—a tax on new developments to help remediate historic building safety defects—from October, and to ensure that the Building Safety Regulator (BSR) continues to process applications more efficiently.
Industry Voices
Stephanie Pollitt, Programme Director for Housing at BusinessLDN, said: "Build-to-Rent homes have a crucial role to play in tackling London's housing crisis, so a slump in supply should serve as a wake-up call for all levels of government. The current review of the London Plan is a crucial opportunity to level the playing field between for-sale housing developments and build-to-rent projects excluded from City Hall's new emergency fast-track route. We also need to see wider action to kickstart the entire market to accelerate housebuilding across all tenures."
Kate Butler, Assistant Director of Policy at Real Estate: UK, added: "Build-to-Rent has a crucial role to play in not only helping London to deliver the new homes the city so desperately needs at a pace and scale, but in providing a rental offer which actively aligns with the overarching need of business to attract and retain a dynamic workforce to support the capital's continued economic growth. However, despite the clear benefits to London's economy, and its role in solving the capital's housing crisis, BTR has continued to face significant delivery headwinds, including viability challenges and regulatory delays. This has been compounded of late by the chilling effect continued speculation around the introduction of rent controls in the private rented sector is having on BTR investor sentiment, and in addition to measures to improve deliverability for BTR, we would urge the government to continue to rule out the introduction of any measures which would further undermine this critical housing tenure."
Government Response
The groups say that without significant reforms, City Hall will continue to struggle to meet its housebuilding targets as developers grapple with financially unviable schemes. A spokesperson for the Ministry of Housing, Communities and Local Government (MHCLG) said: "The Building Safety Levy will help raise funds to ensure homes are safe. We delayed the implementation last year to give developers more time to prepare, while also reducing BSR delays—with new build approvals rising by 40% between February and April." City Hall was contacted for comment.
