Latest analysis from the British Property Federation (BPF) shows that the total number of purpose-built rental homes has reached more than 120,000, a 23% increase over the past 12 months. At the same time the analysis, carried out by Savills, shows that construction has contracted sharply, with the number of homes under construction down 20% year-on-year.

This drop in construction has been an ongoing trend in 2024, with the number of completions consistently outpacing the number of starts. This gap is continuing to widen, with 12,400 more homes completing in 2024 than starting. The slow-down in construction is being seen more acutely in the regions, which dropped by 23% to 34,500 homes, than in London where numbers fell by 11% to 15,500 homes.

The number of BtR new planning applications has also dropped by 12% in the last quarter. The slow-down in construction and new planning applications is a result of increased cost pressures (partly because of regulatory change) and points to a potentially longer-term supply challenge. The abolition of Multiple Dwellings Relief (MDR) in June, is already impacting the ability for schemes to progress due to viability challenges, and the BPF estimates that the number of homes foregone could be between 13,000 and 25,000.