The Intermediary – August 2025 - Flipbook - Page 56
SPECIALIST FINANCE
Opinion
Grasping the Build
to Rent opportunity
B
uild to Rent (BTR)
has reshaped the
UK’s housing market
over the past decade.
But without urgent
support, the next phase
of growth is at risk. New data shows
that while completions remain steady,
the pipeline is weakening.
For the sixth consecutive quarter,
start-on-site activity has lagged behind
completions, and the number of new
schemes in planning has dropped 18%
since Q1. Outside London, regional
growth has stalled entirely.
In response, the British Property
Federation and the Association for
Rental Living have launched the Build
to Rent Alliance, a sector-wide effort
to advocate for the policy reforms
necessary to unlock delivery. While
high-value urban centres may still
absorb the costs and delays associated
with development, many other areas
are struggling. Viability is under
pressure, planning remains slow, and
investor confidence is being tested.
BTR can still play a pivotal role
in accelerating housing delivery.
But it needs coordinated support,
particularly in the regions, to
regain momentum.
Structural value
Over the past 10 years, BTR has helped
establish a new category of purposedesigned rental housing that reflects
the expectations of a generation for
whom renting is a lifestyle choice, not
a temporary stopgap.
Professionally managed schemes,
inclusive service packages and shared
amenities are becoming standard
for tenants who value flexibility,
convenience and community.
The sector has shown its ability
to deliver quality at scale while also
revitalising underused urban sites and
contributing to wider regeneration.
As affordability pressures keep
many would-be buyers in the rental
market for longer, this type of
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The Intermediary | August 2025
housing is increasingly essential.
The challenge now is not demand,
but delivery. Without a pipeline of
viable projects, especially outside
London, the progress of the last decade
risks stalling.
NEIL LEITCH
is managing director of
development finance at
Hampshire Trust Bank
The ground up
At Hampshire Trust Bank (HTB), we
continue to see strong demand for BTR
funding, particularly in the regions.
Our recent transactions reflect a clear
trend: renters expect more from their
homes and are willing to pay for beer
design, greater efficiency and a higher
quality of finish. Developers who
respond to that are creating schemes
that outperform local expectations.
Many of these projects are being
delivered by small to medium (SME)
developers operating at modest scale
and oen on more complex sites.
Some are building to retain assets for
income. Others are planning a term
exit or sale to the institutional market.
These schemes require structuring
that reflects both the asset and the
strategy behind it.
We are working with developers
delivering conversions under
permied development rights (PDR),
large-scale refurbishments and
new-builds with bespoke amenity
packages. These schemes are varied
and, in many cases, highly specialised.
Supporting them takes more than
standard lending. It requires a clear
understanding of the business plan
and the route to exit.
Space to lead
Brokers play a vital role in bringing
these deals together. Those who
engage early are best placed to help
shape the structure, identify the exit
strategy and evidence the assumptions
behind the rental yield.
That clarity allows lenders to make
beer-informed decisions.
Exit planning is essential.
Whether the intention is to refinance
onto a term facility or to sell to an
institutional buyer, the rationale
needs to be credible.
If a borrower is projecting a rental
premium, lenders will want to
understand what underpins it. That
could be layout, location, build quality
or amenities. Whatever the case, the
assumptions must be evidenced.
Brokers who understand how tenant
expectations are evolving, and who
can support that with comparables
or local insight, will deliver greater
value. The most effective deals we see
are those where the broker anticipates
the questions and comes ready with
the answers.
Looking ahead
Build to Rent is no longer a niche. It is
a core part of the UK’s housing mix,
and its continued success depends on
recognising that not all delivery looks
the same.
At HTB, we are commied to
supporting the kind of developers
who are driving BTR forward at a
local level. These are schemes shaped
by knowledge of place, delivered
with intent and designed for longterm impact. Our role is to structure
support that matches the ambition
of the developer, not the other
way around.
There is still time to get this right.
But it depends on those closest to
the ground – the developers, the
brokers and the lenders – being heard
and supported. ●
