What makes Build to Rent (BTR) so appealing to funds – and why does it matter?

December 2, 2025

The Build to Rent (BTR) sector has grown to prominence in the UK over the last decade. This year, we have seen the highest level of investment in the industry since 2022, and in cities like Manchester, this type of property now makes up a fifth of all rental properties.

This growth has been driven largely by the biggest institutional investment funds, which have taken a special interest in BTR. Pensions, banks, hedge funds and other large investors are betting on the sector – but why?

Read on to learn more about:

What makes BTR different to other new build rental properties
Why institutional funds are so keen to invest in BTR
What the future holds for BTR investment in the UK
Why should that matter to buy-to-let investors

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What makes Build to Rent (BTR) property different to other new build residential developments?

Build to Rent (BTR) is a relatively new development type, and it differs from traditional rental properties in several ways. The most important difference is that a BTR building is entirely designed for renters, rather than being a mix of tenants and owner-occupiers.

That does not necessarily make BTR better than other types of rental property in the Private Rented Sector from the perspective of investors. It simply offers something different that may be a better fit for certain types of investors and portfolio strategies.

The focus is on tenant experience and the creation of a true rental community. Top-class amenities, flexible rental terms, all-inclusive pricing and on-site property management are ways BTR developments provide this.

The community aspect also affects the location of many BTR developments. They are overwhelmingly located in city centres, especially outside London. A BTR development needs a large number of young professionals and families to rent the apartments, so it makes sense to place them close to business centres, transport links and city centre lifestyle spots.

These factors make it an extremely appealing investment option for all types of investors – from individual buy-to-let landlords to the giant institutional funds.

However, young professionals and families are also still renting other types of property with great enthusiasm. So, the rise of BTR has not made other types of investment property less appealing or viable.

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Why are institutional funds so keen to invest in BTR developments?

Put simply, this is a market which offers key characteristics big institutional funds want:

Reliable customer base that is forecast to keep growing
Economies of scale, which deliver higher returns on investment
Strong growth in the present
Even stronger growth forecasts in the future
The reliability of bricks and mortar
Predictable income base for the long term

The numbers make it clear these factors are bringing in more and more investment from large funds. Data from CBRE shows there was £1.9bn of investment in UK BTR over the first half of 2025. Another £2.2bn of investment is currently under offer. Most importantly, this is 60% more than the same time last year and one of the largest pipelines recorded to date.

Andrew Saunderson, Head of UK Residential Capital Markets at CBRE, said: “The significant pipeline of investment into the sector is a result of both domestic and international capital and demonstrates the growing appetite for investment into the living sector and points to a busy second half of the year.”

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What the future holds for BTR investment in the UK

All the signs are that BTR will keep growing in the UK. Analysis from Knight Frank shows there are currently 153,000 BTR apartments completed in the UK, a 25% increase in the last 12 months. With a further 54,300 BTR properties under construction, there will be more than 200,000 BTR units online in another year’s time.

BTR completions will likely fall slightly year-on-year from these record highs. However, Knight Frank also notes there are more than 111,400 with full planning granted in the pipeline. Therefore, by 2030, it is likely that there will be more than 300,000 completed BTR units across the country, even with the challenging construction conditions we are seeing at the present time.

That’s enough to complement traditional PRS properties without reducing rental demand. There is an overall shortage of supply, which means there is no shortage of potential renters for properties of all types, even with more BTR in the mix.

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Why should the rise of BTR matter to buy-to-let investors?

BTR is here to stay, making it something all buy-to-let investors should know about. Even if you have only previously purchased completed properties or apartments in traditional residential buildings, this is a growing sector worth considering for your next purchase.

Most importantly of all, data suggests that renters like it – especially young professional renters in regional city centres who are willing to pay high rents for BTR properties.

A survey from the British Property Federation (BPF), the Association for Rental Living (ARL) and PriceHubble shows that:

Single renters spend an average of 33% of their income on rent in BTR buildings.
Couples also love BTR properties, making up 60% of all BTR renters.

The focus on community, all-inclusive living costs and amenities means renters feel they are getting more for their money. It seems everyone wins with Build to Rent properties.

Brendan Geraghty, the chief executive of the Association for Rental Living (ARL), said: “This latest report reinforces the consistency of BTR to deliver attractive, secure homes for renter demographics that mirror the wider PRS.

“Looking ahead to the next five years and beyond, we would like to see the sector develop to make BTR even more accessible to more renters, across all demographics in the UK.”

Want to buy a UK property and expand your buy-to-let portfolio? BTR apartments for sale in Manchester, Liverpool and other growing cities could be the ideal option.

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