14 May 2025
By Charlotte Russell, Lettings Director, Sigma
The build-to-rent (BTR) market has emerged as one of the most dynamic areas of the UK property sector in recent years. Offering tenants high-quality homes with professional management, modern amenities, and flexible contracts, BTR developments have set a new standard for rental living. In 2025, the industry finds itself at a pivotal moment – with rising demand colliding with tightening supply, regulatory reforms on the horizon, and shifting tenant behaviours reshaping the landscape.
As someone who has witnessed these trends first hand in my role as Lettings Director for London and Southern UK, it’s clear that while the BTR sector is undoubtably thriving, adapting to these changes will require a proactive and considered approach.
The supply-demand imbalance
Demand for BTR homes shows no sign of slowing. Recent data from Savills reveals that it now takes an average of just 24 days to let a BTR property in the UK’s 11 largest cities, a marked improvement from the pre-pandemic figure of 32 days. This rapid turnaround highlights the strong appetite for BTR properties, which continue to attract tenants with their high-quality designs, built-in services, and community-focused amenities.
However, behind the growing demand figures lies a growing concern: supply is struggling to keep pace. While completions of new BTR developments remain robust, the number of new projects starts is slowing. This imbalance has significant implications for the sector, particularly in London, where the market has undergone notable shifts since the pandemic.
During the height of COVID-19, many renters left the capital, creating a temporary oversupply of homes. That period of abundance has now passed. Today, tenants are staying put, often to avoid rising rents, and this is contributing to a more static, less fluid lettings market in London. The result is an increasingly strained supply-demand dynamic, particularly as fewer new developments come online to replenish the pipeline.
Anticipating the Rental Reform Bill
Another factor poised to reshape the sector is the anticipated Rental Reform Bill, which is expected to grant tenants the right to flexible rolling contracts. For decades, seasonality has defined the rhythm of the lettings market, with peaks and troughs often tied to fixed-term tenancy agreements. The introduction of periodic tenancies, however, could disrupt this pattern, creating a more fluid but less predictable market. For tenants, this represents a positive shift toward flexibility and control, empowering them to move on their own terms.
The loss of seasonality could also require significant changes in the way landlords manage occupancy and revenue. Without predictable peaks, maintaining stable cash flow may become more challenging. However, spreading tenancy renewal dates across a site can create a more balanced and manageable lettings cycle, reducing the risk of large, concentrated void periods.
For landlords with properties in consolidated areas, this could lead to a more consistent flow of rental income, rather than facing seasonal peaks and dips. It also presents a potential advantage for rental increases, as adjustments can be made more incrementally across a development rather than being subject to intense competition during seasonal high-demand periods. This new dynamic, if managed well, could provide greater stability for any investor in the long run.
The introduction of periodic tenancies also opens up questions about how these changes will influence tenant behaviour over the long term. Will tenants move more frequently or remain in properties for extended periods, as flexibility allows them to wait out market conditions? This could see further issues to availability for tenants in turn pushing rental prices higher in years to come, potentially negating the fairer market the Renters Rights Bill is looking to achieve, but it will open up opportunity for further investment to deliver good quality homes where demand will continue to rise.
Regional strength
The picture in the regional BTR market is currently a good one. In many areas outside the capital, single-family homes are thriving, with tenants staying for an average of 3.5 years. Sigma’s Simple Life Homes portfolio, which now includes over 6,500 family houses, reflects this growing trend, with minimal void periods and strong demand. This longevity highlights the appeal of BTR properties as long-term housing solutions for families and professionals seeking stability—something that appears to be becoming the norm in the single-family market.
Redefining the home
The concept of home is evolving, and with it, the traditional expectation that a ‘proper home’ equates to a house with a garden. The rise of multi-family BTR developments reflects this shift, as more people prioritise quality, location, and community over outdated housing ideals. These purpose-built rental properties offer convenience, security, and long-term stability – key factors that are changing the way people think about renting.
In many ways, this mirrors the ‘vertical living’ model seen across Europe, where renting is not just common but aspirational. With well-designed spaces, professional management, and built-in amenities, BTR homes are redefining what it means to rent in the UK. As affordability challenges persist and homeownership becomes less of a priority for younger generations, this shift could mark a fundamental change in the UK housing market, positioning BTR as not just an alternative, but a preferred way of living.
What lies ahead for BTR?
As the BTR sector navigates this transformative period, the road ahead is filled with opportunities. The continued demand for high-quality rental housing is a testament to the sector’s success, but supply shortages, regulatory reforms, and changing tenant behaviours are reshaping the environment.
To thrive, landlords must remain agile, adapting to these shifts while staying focused on delivering the high-quality homes that tenants value. For me, the key lies in maintaining a tenant-first approach—ensuring that flexibility, community, and quality are at the heart of everything we do. While my role at Sigma Capital provides me with a front-row seat to many of these trends, these insights reflect broader movements shaping the industry as a whole.
As we look to the future, it’s clear that the BTR sector has an exciting opportunity to redefine the UK rental experience and solidify its place as a cornerstone of the housing market.
