An In-Depth Analysis of the Build-to-Rent (BTR) Sector in the UK: Growth, Economic Models, Regulatory Challenges, and Fire Safety Considerations

Abstract

The Build-to-Rent (BTR) sector in the United Kingdom has experienced significant growth in recent years, emerging as a pivotal component of the housing market. This research report provides a comprehensive analysis of the BTR sector, examining its rapid expansion, economic models, regulatory challenges, and fire safety considerations. By exploring these facets, the report aims to offer a nuanced understanding of the BTR landscape and its implications for housing policy and urban development.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

1. Introduction

The United Kingdom has faced a persistent housing shortage, leading to increased demand for rental properties. In response, the Build-to-Rent (BTR) sector has emerged as a significant contributor to addressing this demand. BTR refers to purpose-built, institutionally owned, and professionally managed residential properties that are let on the open market rather than sold. This model contrasts with traditional private renting, where individual landlords own and manage properties. The rapid growth of the BTR sector necessitates a thorough examination of its economic models, regulatory frameworks, and safety standards to ensure it effectively contributes to the housing market without compromising resident safety.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

2. Growth and Economic Model of the BTR Sector

2.1 Rapid Expansion of the BTR Sector

The BTR sector in the UK has witnessed substantial growth over the past decade. As of early 2025, there are over 127,000 operational BTR homes across the country, with an additional 49,000 under construction. This expansion signifies a significant shift in the housing market, with BTR properties accounting for a growing share of new-build completions. In 2024, BTR delivery constituted 8% of new-build completions across England and Wales, up from 5% in 2019. This trend underscores the increasing importance of BTR in meeting housing demand. (savills.com)

2.2 Economic Drivers and Investment Trends

Several factors have contributed to the rapid growth of the BTR sector. Institutional investors, including pension funds and insurance companies, have recognized the potential of BTR as a stable and long-term investment. In 2024, £5.1 billion was invested in BTR, with over half of this amount invested in the final quarter, marking a record calendar year for the sector. Notably, 88% of this investment was concentrated in regional markets outside of London, indicating a diversification of interest beyond traditional urban centers. (en.savills.dk)

The economic model of BTR is characterized by large-scale developments that offer economies of scale, professional management, and standardized services. This approach aims to provide high-quality rental housing that appeals to a broad demographic, including middle-aged renters who are increasingly remaining in the rental market due to affordability challenges in homeownership. (ft.com)

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

3. Regulatory Ambiguities and Safety Concerns

3.1 Regulatory Framework and Ambiguities

The rapid expansion of the BTR sector has highlighted certain regulatory ambiguities, particularly concerning fire safety standards. While new high-rise buildings in England are required to have sprinkler systems, there is no requirement to retrofit sprinklers in existing buildings. This regulatory gap has led to concerns about the adequacy of fire safety measures in BTR developments. (en.wikipedia.org)

3.2 Fire Safety Challenges in BTR Properties

BTR properties, especially high-rise buildings, present unique fire safety challenges. The use of combustible materials in cladding and balconies, as seen in the 2019 Barking fire, has raised alarms about the safety of such developments. In the Barking incident, the fire spread rapidly, engulfing wooden balconies and leading to significant property damage. Residents reported that fire alarms did not trigger, and sprinkler systems failed to activate, highlighting critical safety lapses. (en.wikipedia.org)

The Grenfell Tower fire in 2017 further underscored the catastrophic potential of fire safety failures in high-rise buildings. The absence of sprinklers and the use of flammable cladding materials contributed to the rapid spread of the fire, resulting in a tragic loss of life. These incidents have prompted calls for stricter fire safety regulations and the retrofitting of existing buildings with modern fire safety measures. (en.wikipedia.org)

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

4. Comparison with Other Housing Tenures

4.1 Safety Standards in Social Housing

Social housing in the UK is subject to stringent safety regulations, including the requirement for sprinkler systems in new high-rise buildings. However, existing social housing stock often lacks these features, leading to disparities in safety standards between new and older developments. The failure to retrofit sprinklers in existing buildings has been a point of contention, with advocates arguing that such measures are essential for resident safety. (en.wikipedia.org)

4.2 Safety Standards in Private Renting

Private rented sector (PRS) properties, particularly older buildings, may not meet modern fire safety standards. The Housing Health and Safety Rating System (HHSRS) allows environmental health officers to enforce fire safety measures in existing dwellings, but the effectiveness of this system in ensuring comprehensive safety compliance has been questioned. The lack of a requirement to retrofit sprinklers in existing PRS buildings contributes to the safety disparities observed between different housing tenures. (en.wikipedia.org)

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

5. Legislative Reforms and Recommendations

5.1 Proposed Legislative Reforms

To address the identified safety gaps, several legislative reforms have been proposed. The Fire Safety Act 2021 provides explicit parameters for the Regulatory Reform (Fire Safety) Order 2005, including structures, external walls, and individual flat entrance doors in multi-occupied residential buildings. This act aims to clarify responsibilities and enhance safety measures in existing buildings. (en.wikipedia.org)

Additionally, the Building Safety Act 2022 introduces significant changes to building regulations, emphasizing the safety of people in or about buildings and the standard of buildings. These reforms aim to address systemic issues in building safety and ensure that all residents, regardless of tenancy type, are protected. (en.wikipedia.org)

5.2 Recommendations for Ensuring Equitable Fire Protection

To ensure equitable fire protection for all residents, the following recommendations are proposed:

• Retrofitting Sprinkler Systems: Implement a nationwide program to retrofit sprinkler systems in existing high-rise buildings, prioritizing those with vulnerable populations.

• Standardized Safety Measures: Establish standardized fire safety measures across all housing tenures, including the use of non-combustible materials in cladding and balconies.

• Regular Safety Audits: Conduct regular fire safety audits in all residential buildings to identify and mitigate potential hazards.

• Enhanced Enforcement: Strengthen enforcement mechanisms to ensure compliance with fire safety regulations, with penalties for non-compliance.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

6. Conclusion

The Build-to-Rent sector has emerged as a significant player in the UK’s housing market, offering a solution to the growing demand for rental properties. However, the rapid expansion of this sector has highlighted critical regulatory ambiguities and safety concerns, particularly regarding fire safety standards. By implementing comprehensive legislative reforms and standardized safety measures, it is possible to address these challenges and ensure that all residents, regardless of tenancy type, have access to safe and secure housing.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

References

• Savills. (2025). UK Build to Rent Market Update – Q1 2025. Retrieved from (savills.com)

• Savills Denmark. (2024). UK Build to Rent Market Update – Q4 2024. Retrieved from (en.savills.dk)

• Wikipedia. (2025). Build to rent. Retrieved from (en.wikipedia.org)

• abrdn. (2024). Homing in on the UK’s build-to-rent sector. Retrieved from (abrdn.com)

• Get Living. (2022). UK Build-to-Rent homes to increase five-fold in the next decade. Retrieved from (corporate.getliving.com)

• Wikipedia. (2025). Barking fire. Retrieved from (en.wikipedia.org)

• Wikipedia. (2025). Criticism of the response to the Grenfell Tower fire. Retrieved from (en.wikipedia.org)

• Wikipedia. (2025). Building regulations in the United Kingdom. Retrieved from (en.wikipedia.org)

• Wikipedia. (2025). History of fire safety legislation in the United Kingdom. Retrieved from (en.wikipedia.org)

• Wikipedia. (2025). Tower blocks in Great Britain. Retrieved from (en.wikipedia.org)