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\t\t“London housebuilding is in an absolute state,” a think tank director said\t<\/p>\n\t\t\tWednesday 15 April 2026 6:00 am
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tWednesday 15 April 2026 10:13 am\n\t<\/p>\n
\t\t“London housebuilding is in an absolute state,” a think tank director said\t<\/p>\n
The construction of build-to-rent homes in Britain is in danger of grinding to a halt as the planning wait for London homes has almost doubled in this decade.<\/p>\n
The number of build-to-rent homes under construction has fallen for the ninth consecutive quarter, according to data shared exclusively with City AM.<\/p>\n
The government has pledged to build 1.5m homes by the next general election but leading figures in the housebuilding industry have warned that low demand and high costs have imperilled this target.<\/p>\n
Housebuilders say build-to-rent homes are a vital part of housing delivery, with many more young people now renting, as the average age of first-time buyers grows.<\/p>\n
London rental housebuilding drops off<\/p>\n
While 59,874 build-to-rent homes were being built in the first quarter of last year, this fell 17 per cent year on year by the first quarter of 2026, data compiled by trade body the British Property Federation (BPF) and estate agents Savills has shown.<\/p>\n
The trade body said the government must recognise the \u201cvital contribution\u201d made by build-to-rent homes to overall housing delivery, with this housing contributing to nearly one in 10 new homes.<\/p>\n
The number of build-to-rent homes under construction has fallen a total of 22 per cent since the first quarter of 2026, to 49,984 in the first quarter of this year.<\/p>\n
Progress on new build-to-rent homes has collapsed even further, with construction starts having fallen more than 70 per cent in the last two years, from 19,044 in the first quarter of 2024 to 5,619 this year.<\/p>\n
The construction of rental homes in London offers an even \u201cstarker\u201d cause for concern, the BPF has said.\u00a0<\/p>\n
London is expected to build 88,000 new homes every year to meet the city\u2019s needs but consultancy firm Molior has predicted that only 4,550 per year will be built in 2027 and 2028.<\/p>\n
The number of rental homes under construction in the capital fell by 29 per cent year on year to 12,134 in the first quarter of 2026, and starts fell 67 per cent to 1,048.<\/p>\n
Robert Colvile, director of think tank the Centre for Policy Studies (CPS), told City AM the drop-off in rental housebuilding is \u201cdisappointing but not a surprise\u201d.\u00a0<\/p>\n
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\t\t\tHousebuilder hopes raised as government pledges 200k homes in new town scheme<\/a><\/p>\n \u201cLondon housebuilding is in an absolute state and the viability problems are pretty severe. The cost of capital has gone up hugely [and] the cost of construction has gone up above inflation,\u201d Colvile said.<\/p>\n \u201cThe new building safety regulator has made it essentially impossible to build buildings above 18 metres, which in London is pretty much every building.\u201d<\/p>\n Planning delays nearly double<\/p>\n The federation said planning application delays are harming housebuilding, with the average wait for planning consent for a build-to-rent home in London having lengthened from eight to 15 months on average in the last six years.<\/p>\n This is 150 per cent longer than the statutory<\/a> 13 week time limit for major applications.<\/p>\n The wait for build-to-rent planning consent in the UK as a whole has also grown considerably, to 14 months on average.<\/p>\n The BPF said incoming changes to planning policy could streamline decisionmaking, but said the government should loosen taxes on construction.<\/p>\n Jacqui Daly, director of Savills\u2019 residential research, told City AM: \u201cIf build\u2011to\u2011rent is to realise its full potential as a scalable and reliable source of new homes, it needs a more supportive operating environment, one that improves planning efficiency, provides regulatory certainty and enables schemes to progress quicker from consent to construction.\u201d<\/p>\n In February, an association representing build-to-rent housebuilders wrote<\/a> to the government calling on it to loosen policy and tax constraints to boost the sector.<\/p>\n The Association for Rental Living\u2019s warning came following the collapse<\/a> of retailer John Lewis\u2019 build-to-rent venture, which the shadow business secretary dubbed a \u201cmajor blow\u201d to Labour\u2019s housebuilding target.<\/p>\n Danny Pinder, director of the BPF, told City AM: \u201cThe rental market continues to come under intense pressure, with supply constrained and development challenging \u2013 exacerbated by entirely avoidable impacts of the incoming Renters\u2019 Rights Act and renewed discussion of rent controls.\u201d<\/p>\n The Ministry of Housing, Communities and Local Government has been contacted for comment.<\/p>\n \t\t\t\t\tRead more<\/p>\n