The UK’s Build-to-Rent (BTR) sector recorded more than £3 billion of investment in the first nine months of 2025, according to new data from Knight Frank, highlighting continued activity despite wider economic uncertainty.
Over £850 million was invested in Q3 2025, a 35% year-on-year increase, maintaining the strong momentum seen in the first half of the year when £2.2 billion of capital was deployed.
Single-family housing (SFH) accounted for 58% of transactions in Q3 and 62% year-to-date, reflecting sustained demand for rental houses. By value, SFH represented 40% of quarterly investment, supported in part by subdued sales conditions for housebuilders, which have created opportunities for institutional investors.
More than £500 million was committed to developing multifamily urban schemes during the quarter. Knight Frank noted ongoing appetite for forward funding large-scale projects, though viability pressures continue to limit new activity.
The report also highlights growing liquidity in completed and operational stock, with seven multifamily deals completing so far this year. Across multifamily, single-family, and co-living assets, 53 transactions have been recorded in 2025 to date – an 8% rise year-on-year.
Lizzie Breckner, head of BTR Research at Knight Frank, said: “Investment volumes have proven resilient in the face of macro challenges, reflecting the strong appetite for purpose-built rental stock. It’s particularly encouraging to see a strong quarter for multifamily investment, which we expect will pick up further.
“Persistently high inflation and bond yields are likely to put a dampener on activity for the remainder of the year, as will an element of policy uncertainty in the run-up to the November Budget. However, there is a significant volume of stock under offer or in the market, which suggests it will still be a busy run-in to Christmas.”
According to Jack Hutchinson, a partner in the Residential Investments team at Knight Frank, investor appetite remains particularly strong for both single-family and multifamily assets. However, within the multifamily space, challenges around construction viability persist, resulting in greater liquidity for operational assets.
“In the SFH sector particularly, transaction volumes have remained high for funding deals and, to an extent, operational stock as the market matures,” he explained.
“We are also witnessing continued growth in the breadth of capital entering the SFH sector, with a number of notable new entrants deploying in 2025,” he continued. “This is a trend we expect to continue as investors view SFH as a resilient, income-generating asset class with strong long-term demographic tailwinds.”
Lisa Attenborough, head of Knight Frank Capital Advisory, added: “From a capital markets’ perspective, we’re seeing healthy appetite from both debt and equity providers for BTR transactions. Lenders remain highly competitive for well-structured deals with strong underlying fundamentals, particularly for stabilised assets with proven income streams. We are seeing senior leverage move beyond 60% LTV with margins coming under 150bps for best-in-class stock. Institutional equity allocations continue to grow from both UK and international investors.”
Read the orginal article: https://propertyindustryeye.com/btr-investment-volumes-up-35-in-q3-reaching-3bn-year-to-date-knight-frank/
