Lower-rise build-to-rent housing could answer to some of the UK housing market’s biggest challenges – from affordability and viability pressures to delays in the planning and regulatory system.
More than 250,000 apartments are now completed, under construction or in planning across the UK’s build-to-rent sector – and most follow a familiar formula: high-rise towers packed with amenities and aimed at affluent professionals.
The next generation may look markedly different. Developers started just 5,619 units during the year through Q1 2026, down 65% compared to the same period a year earlier. Rising construction costs, tighter regulation, an affordability squeeze and persistent planning bottlenecks – particularly delays linked to the Building Safety Regulator – have squeezed returns and raised the risks of development, especially for tall towers.
Developers and investors are increasingly exploring lower-rise schemes – generally buildings below the 18m threshold that triggers additional scrutiny under the Building Safety Act. The model is already common across much of continental Europe, where institutional rental housing is often delivered through mid-rise or “walk-up” apartment blocks rather than highly amenitised towers.
By building lower, developers may be able to reduce construction costs, avoid some of the delays associated with the Gateway process and ultimately deliver homes at rents aimed closer to the mid-market.
Viable development
Investors are beginning to take notice. Greystar in March said it was exploring lower-rise BTR models as part of a push towards more affordable rental housing close to UK employment hubs. In an interview with Estates Gazette, managing director of UK development Thomasin Renshaw made it clear there were push and pull factors to the decision – that jobs growth in the likes of London or Oxford and Cambridge offered a deep pool demand from short-term renters who want flexibility at a time when the risks of some types of development are becoming more challenging:
“We’ve got to stop talking about profit margins. We’ve got to talk about return on risk,” Renshaw said. “If there isn’t a return on risk available for development, no new homes are going to get built.”
Still, turning the concept into a viable development model presents challenges. Higher interest rates, elevated build costs and affordability constraints are not new challenges – so if lower-rise BTR makes so much sense on paper, why hasn't the model taken off already?
Larger sites
Scale is part of the problem. Institutions that invest in operational assets generally want between 300 and 500 units, which is easier to achieve in high rise towers. Developers therefore need to find larger sites in locations where land values remain viable, demand exists for mid-market rental housing and residents can still commute easily to major employment hubs.
Land values are another challenge. Many development sites were originally priced on the assumption they would accommodate high-density towers. Replanning those schemes as lower-rise developments can mean a significant hit to land value, which would be resisted by landowners.
Planning may may prove both a constraint and an opportunity. While many local authorities remain focused on densification in city centres, that could create openings for lower-rise schemes in edge-of-city locations where larger sites are available and there is less pressure to build vertically.
Finding the right sites will be critical if lower-rise BTR is likely to emerge as a middle ground between highly amenitised city-centre towers and suburban single-family housing. That would mark a significant step forward for the sector, signalling a more mature rental market where different products serve different demographic groups.
The appeal for developers is only likely to grow in the wake of the Renters' Rights Act, which lets tenants challenge rents if they believe they are above local market levels. Stock already priced close to or on par with neighbourhood norms may face fewer challenges in practice, whereas units pushed towards the top of the local range may be more exposed to scrutiny.
Regulatory efficiency
A meaningful pick up in delivery of low-rise BTR will hinge on closer cooperation between developers, investors and local authorities. Greystar's Renshaw emphasised the importance of open dialogue with councils and public sector partners about what is financially deliverable, arguing that the industry needs more realistic conversations around viability, risk and affordability.
The fact that what is a fairly simple part of the housing market is so challenging to deliver shows there are critical gaps in UK development policy. If the industry wants to expand supply meaningfully, we need to improve regulatory efficiency and become more flexible about the types of rental housing schemes supported. Developers and investors, meanwhile, may need to rethink assumptions around density, scale and product mix.
Lower-rise BTR is unlikely to replace the tower model that has led the sector to date. But if the market can find the right balance between viability, affordability and planning support, it could become an important part of the solution to the UK’s housing shortage.
