Fresh figures from the British Property Federation and Savills shows 17,309 BtR homes were completed in the past 12 months, up 18% as demand rises for rental homes.

But the number of new schemes breaking ground has dropped for the fifth quarter running, with homes under construction falling 14% year-on-year.

The slowdown is being linked to mounting delays at the Gateway 2 approval stage, with the Building Safety Regulator still struggling to clear a backlog of applications inherited from collapsed private building control firms.

London has seen the steepest fall, with BtR starts down 18% to just 15,000 homes under construction. Across the regions, the pipeline has shrunk by 12% to 34,870.

Planning activity also shows signs of strain. While overall consents are up 13% and the early-stage pipeline has grown 5%, the number of detailed planning applications is down 16%—highlighting a growing disconnect between planning permissions and actual delivery.

Melanie Leech, chief executive, British Property Federation, said: “Completions remain robust, and planning activity is holding up well, but the sector is facing a real bottleneck in progressing schemes through to construction.

“Viability challenges, coupled with continued uncertainty around project timelines are slowing momentum just at a time when rental demand is rising sharply.

“Investor appetite is there but unlocking it will require a concerted effort to support the delivery of BtR homes. Urgent action is needed in particular to deal with the pipeline blockage currently being caused by the Building Safety Regulator.”

British Property Federation chief executive Melanie Leech said: “There’s a growing logjam in getting projects from planning through to construction. Delays at the Building Safety Regulator are a major factor and need urgent attention if the sector is to continue delivering at scale.”

Savills’ Guy Whittaker added: “The first quarter of 2025 marked the highest Q1 for new investment since 2022, supported by over £500m in urban multifamily forward funds, which will deliver over 1,500 homes once complete.

“There are significant challenges to future supply though, particularly for schemes facing building safety delays. This represents a substantial threat to current housing delivery and puts Government housing targets at risk.”