More than £850m was invested into UK Build To Rent in the third quarter of 2025, up 35% year-on-year.
That’s the latest news from Knight Frank which says this maintains momentum from the first half of the year, where £2.2 billion was deployed and takes total investment for the first nine months of the year to just over £3 billion across multifamily (MFH), single family (SFH) and co-living deals.
Single family continues to perform strongly, accounting for 40% of spend over the course of the quarter and 46% of investment so far this year, reflecting the ongoing strong appetite and liquidity for houses for rent.
But more than £500m was allocated to developing multifamily schemes in urban locations in Q3, suggesting robust demand still for forward funding of large-scale developments.
The agency says that across the UK BTR sector, some 53 deals have completed so far in 2025, up by 8% on the same point last year.
Increasing transaction numbers have been supported by the uptick in SFH investment, which tend to be lower lot sizes. Indeed, excluding portfolio deals, the average value of a SFH deal in 2025 so far was £42m, versus £83m for MFH.
Knight Frank predicts that persistently high inflation and bond yields are likely to put a dampener on activity for the remainder of the year, as will an element of policy uncertainty in the run-up to the November Budget.
But in a statement it says: “Investor appetite remains extremely strong for MFH. Challenges around construction viability, alongside gradually increasing volumes of standing stock have led to an increase in transaction volumes for operational assets. For SFH, transaction volumes remain high across both development deals (where construction viability is less of a challenge than MFH) and operational stock.”
The UK’s BTR stock now stands at 153,367 complete homes, up by 25% compared to Q3 2024.
There are a further 54,354 homes under construction meaning the sector should rise to more than 200,000 operational homes within the next few years.
But the agency cautions that challenges impacting the wider development market mean that outside of the existing development pipeline the longer-term outlook for supply is less certain.
So far this year, more than 20,000 BTR homes have completed, putting the sector just behind last year’s record delivery. SFH has accounted for just under a fifth of completions so far this year, up from a tenth in 2021.
