"According to the Association for Rental Living Manifesto 2025-26, BTR has the potential to deliver up to 2 million additional quality homes and unlock an extraordinary £300 billion in long-term investment for the UK economy."
- Andy Jones - LRG
Is Build to Rent (BTR) the most sustainable and secure investment option in the current market? In short, yes. But the real answer lies in understanding how BTR has evolved – and why the sector now presents a compelling long-term opportunity for investors, developers and occupiers alike.
Changing market conditions
Once a nascent, alternative form of property investment, Build to Rent (BTR) has now reached maturity and not only matches, but exceeds, many benefits offered by other forms of investment. With the total number of completed units having now surpassed 127,150 (16% growth in the past year alone: BPF stats), BTR is now a recognised sector in its own right. Furthermore, it is attracting a growing base of institutional investors (up almost 40% in Q1 2025: CBRE stats).
Unsurprisingly, BTR is now an important part of the housebuilding mix in large cities, making up 14% of new accommodation (Centre for Cities) and is set to have an important role in the government’s twelve new towns.
In a broader economic market characterised by volatility – whether economic, political or environmental – investors seeking security are finding it in BTR.
This is the result of the evolution of BTR, from a predominantly urban, apartment-based model into a more diverse and family-oriented suburban product.
The rise of the BTR suburban community
This newer BTR suburban model, also known as Single Family Housing (SFH), translates the most successful features of traditional BTR – service, flexibility and professional management – into a form more aligned with the needs of families and those seeking long-term tenure.
This new iteration favours houses over flats, outdoor space over shared lounges, and locations beyond the city core. It is a lifestyle-driven product that appeals to maturing Millennials, growing families, and the rising cohort of ‘comfortable renters’: people with means who prefer flexibility to ownership. According to Government data, 44% of renters fall into this category, and many expect to rent for the long term.
The growth in demand is striking. Families account for 43% of suburban BTR households (BPF stats), almost double the proportion seen in urban BTR schemes. And as working from home and counter-urbanisation trends continue, the appeal of BTR suburban communities is likely to intensify.
Professionalising the private rented sector
At the same time, the broader private rented sector (PRS) is undergoing structural change due to rising regulation and policy reform – most notably the Government’s commitment to ‘professionalise’ the sector through the Renters’ Rights Bill. The latest Housing Insight Report from Propertymark reveals that tenant demand continues to outpace supply, with an average of 7 applicants for each available property.
Tenant demand continues to rise and there remains a shortage of available properties to rent. In our own experience at across all LRG brands, we’ve seen this trend mirrored nationally.
This shift creates an opening for corporate landlords to step in and meet the demand – and BTR is well positioned to do so. With higher quality homes, integrated services and long-term management, BTR schemes meet the needs of today’s renters and regulators alike.
Stability, scalability and service
For investors, BTR suburban communities offer a unique mix of characteristics: consistent demand, strong yields, ESG credentials and an aggregated asset structure that delivers scale. The model’s flexibility – allowing for portfolios to include a blend of residential, retail and leisure units – supports both short-term returns and long-term value.
And crucially, residential property is proving itself as a more robust asset class than commercial real estate.
At LRG, we’ve seen heightened interest from institutional investors, including those shifting away from traditional commercial and retail assets. Our national footprint and depth of local market knowledge enable us to support clients in assembling and expanding tailored portfolios, often starting with one-off suburban homes and growing to form cohesive communities.
Supporting ESG and long-term goals
Sustainability and social responsibility are high on the agenda for institutional investors. The BTR suburban model, by its very design, enables energy-efficient infrastructure – from heat networks to sustainable transport. It also offers an opportunity to deliver measurable social value: family housing, long-term tenure, and community-focused services.
Operators such as John Lewis have recognised this, seeking to offer high-quality homes underpinned by trusted brand values. Their move into BTR demonstrates the fact that it is no longer an alternative asset, but a mainstream opportunity with a core role in investment strategy.
Opportunities for diversification and innovation
There is also considerable potential for BTR suburban communities to evolve in form and function. Schemes may integrate later living accommodation, affordable housing, or social infrastructure such as schools and GP surgeries. Developers are increasingly blending tenures across larger sites to spread risk and accelerate delivery, with BTR often playing a pivotal role in enabling placemaking and early revenue generation.
At LRG, we’re seeing developers respond to these dynamics by retrofitting BTR into master plans or pivoting mid-scheme to reflect changing conditions. The model's ability to adapt makes it uniquely resilient.
Looking ahead
According to the Association for Rental Living Manifesto 2025-26, BTR has the potential to deliver up to 2 million additional quality homes and unlock an extraordinary £300 billion in long-term investment for the UK economy.
The reasons are clear: strong and growing demand, favourable regulatory winds, proven investor appetite, and a product that delivers for both occupiers and funders. The recent surge in our own instructions reflects that momentum—and points to a long-term trend rather than a passing opportunity.
In uncertain times, few sectors can offer the same combination of yield, security, and scalability. That is why, as an investment class, BTR – and particularly BTR suburban communities – stands out as the most sustainable and secure choice in the current market.
