Investment in the UK build-to-rent sector reached £3bn during the first half of 2026, marking the second-strongest start to a year on record, according to figures from JLL.
The total represented a 28% increase compared to the same period in 2025 and stood 6% above the five-year average. It was only the second time investment had reached the £3bn mark in a six-month period, following 2023.
Portfolio transactions drive activity
Three significant portfolio transactions in the second quarter accounted for £2bn of the total investment. These included L&Q’s 3,200-home Metra Living portfolio, Lendlease’s Elephant Park development in London, and Blackstone’s sale of approximately 1,000 single-family homes from its Leaf Living business.
The figures marked a recovery from a subdued first quarter, when just £736m was invested. Multifamily investment accounted for two-thirds of all BTR transactions during the first half, boosted by the Metra Living and Elephant Park deals.
Investment in single-family rental homes reached £1bn, 7% higher than the previous year and 3% above the five-year average. The sector’s performance comes amid concerns about housing affordability affecting potential buyers.
Development funding falls sharply
Despite the strong investment figures, JLL reported that funding for new multifamily development had fallen to its lowest level since at least 2015. Investment through forward funding, forward purchases and land acquisitions accounted for just 10% of multifamily investment during the first half of the year, compared with around two-thirds between 2023 and 2025.
Karl Tomusk, associate in UK living research at JLL, said: “The headline numbers are, of course, encouraging and point to a market seeing considerable investor demand, including from institutions. But the challenge continues to be finding ways to make development stack up.”
Tomusk added that the dearth of investment in new multifamily homes so far in 2026 was “staggering” even compared to recent years. The development challenges persist despite recent improvements in mortgage rates, which could affect the broader housing market.
Market outlook
Tomusk suggested that while economic uncertainty remained, a recovery in development activity could follow if market conditions improved in what he described as “a fundamentally undersupplied sector”.
The figures indicate strong institutional appetite for existing BTR assets, but highlight the ongoing difficulties developers face in bringing forward new schemes in the current economic environment.
