The Build to Rent (BTR) industry is calling for urgent government intervention after a leading investor, John Lewis Partnership, exited a major residential initiative. The Association for Rental Living (ARL), representing finance houses and BTR providers, has raised concerns about the viability of large-scale rental delivery in the current economic environment.
The ARL’s open letter to government ministers outlines pressing issues such as rising costs, challenging financing conditions, and an urgent need to improve the investment climate.
The organisation demands a coordinated government response to safeguard future housing supply and prevent further market instability.
Investor withdrawal sparks sector concerns
The unexpected decision by John Lewis Partnership to halt its build to rent plans has sent ripples through the sector. In a public statement, the company cited significant changes in the economic landscape, including 'less stable investment returns, higher borrowing costs, and climbing development expenses', as primary reasons for the withdrawal.
Industry leaders say the departure of such a prominent investor highlights broader challenges facing those developing purpose-built rental properties.
Without further support, the sector warns of 'slower housing delivery, reduced rental supply, worsening affordability, and increased reliance on short-term or lower-quality stock'.
ARL issues demands for policy changes
In response to these developments, the Association for Rental Living has issued an open letter to senior government officials. The ARL argues that, to avoid a decline in rental delivery, policy reforms are required to create an environment conducive to long-term institutional investment in the sector.
The statement urges the government to provide clear, stable policy frameworks and avoid adding new layers of regulation without proper economic analysis.
The ARL warns that potential investors need assurance that the UK offers a predictable and welcoming climate for large-scale rental development.
Calls for planning and regulatory reform
Central to the ARL’s demands is reform of the planning system. The organisation wants housing to be formally recognised as critical national infrastructure to speed up delivery and support long-term sector growth.
The ARL has called for explicit recognition of Build to Rent schemes within planning policy and a requirement for local councils to include BTR-specific policies in their development plans.
It is also advocating for mandatory targets for purpose-built rental homes within local authority housing quotas, arguing this is essential to address the growing demand for rental housing.
Stamp duty and licensing under scrutiny
The ARL is pressing for changes to key elements of the tax and licensing framework. In particular, it seeks the reinstatement of Multiple Dwellings Relief for Stamp Duty Land Tax, a mechanism previously used to incentivise large-scale property investment but abolished in March 2024.
The organisation is also requesting a rationalisation of selective licensing regimes, which are currently considered by industry stakeholders to be fragmented and burdensome.
The ARL believes a more proportionate approach could lower operational costs for institutional investors and encourage new entrants into the market.
Labour urged to demonstrate support
While acknowledging that legislative changes may take time to implement, the ARL has asked the Labour government for an immediate public commitment to supporting the Build to Rent sector.
The group hopes a clear statement of intent would provide reassurance during this period of market uncertainty. According to the ARL, recognising the viability challenges faced by the sector is vital for inspiring investor confidence and sustaining the delivery of new rental housing.
The group argues that, without such action, the UK risks losing its reputation as an attractive investment destination for large-scale rental providers.
Final Summary
The departure of John Lewis Partnership from the Build to Rent sector has prompted calls for immediate government action. The Association for Rental Living’s demands focus on increased policy stability, targeted planning reform, and targeted tax relief to ensure continued investment and new rental supply.
These concerns point to broader questions about the viability of institutional rental housing in the current environment and underline the importance of government-industry dialogue in addressing the UK’s pressing housing needs. For additional insights and updates on rental market policy, the Pie app offers further resources.
