Investors spent £679m acquiring or funding BTR assets in the first quarter of 2026, the slowest Q1 of activity since 2018.
The latest Knight Frank UK BTR Market Update found there were 12 transactions during this time, which followed a “bumper end” to 2025.
Caution among investors was partly attributed to geopolitical volatility and signs that inflation may be creeping back up.
Investment trepidation aside, the market update found BTR supply to be up from the same period in 2025.
The UK’s BTR stock stands at 165,790 completed homes, up 27% nationally from the start of 2025.
There are a further 50,690 homes under construction with 126,565 in the planning pipeline.
However, converting these permissions into starts remains a challenge according to Knight Frank due to headwinds facing urban high-rise development.
The number of units under construction has fallen 10% as a result, with over 24,000 units expected to complete this year.
This would reflect a slight drop from the number of units completed last year.
“However, a large proportion of these schemes will have been funded in a less challenging development environment through 2023 and 2024,” added Knight Frank, in its commentary that accompanied the data.
“Longer-term the drop in new BTR starts means delivery is expected to reduce further to the end of the decade.”