Are slower letting rates changing the build-to-rent market in London?

We recently reported on slow lettings in student accommodation, which is experiencing its worst year in a decade for empty or void properties amid a fall in the number of Chinese students. And we picked up anecdotal evidence that smaller institutional investors in the build-to-rent (BTR) sector are having trouble with voids, too.

To establish whether BTR operators are struggling to find tenants, we need a baseline. According to consultancy Molior, in the first nine months of 2025, the average lease-up rate across newly launched urban rental schemes in London was 26 homes per month.

Some schemes are performing much better than average. Grainger, a BTR operator providing mid-market homes, is leasing its Seraphina development in Canning Town at 50 homes per month – which is 38% of the scheme’s 132 homes each month. Meanwhile Greystar, which provides homes at the higher end of the market, is leasing close to 100 homes a month at its Pearl Yard development in Bermondsey – equating to 6% of the scheme’s 1,624 homes a month.

So, are these figures high or low?

Rebecca Taylor, managing director of multifamily at Long Harbour, which owns The Eades development, tells Inside Housing Living that these figures are “normal”.

Ms Taylor is also chair of the BTR committee at the British Property Federation and part of the BTR Alliance, a cross-sector group that champions the growth of the tenure.

Sharief Ibrahim, executive director and head of residential at CBRE, seems to agree. He explains that during the summer in Wembley, a BTR hotspot, CBRE completed around 10 transactions per week, or 40 per month. But in the winter, this fell to around five transactions per week, or 20 per month. On average, he says, this works out at somewhere in the mid-20s per month.

What has been going on behind the scenes to drive these figures?

The journey since the pandemic

According to Mr Ibrahim, the Covid pandemic introduced an unusual pattern by historical standards, where letting demand for urban flats had been steady throughout the year. But last year, letting demand returned to what it was before the pandemic: seasonal.

“Before Covid… the number of transactions in quarter four and quarter one were very low,” he says. “The reasons for that are obvious – the nights get darker, it’s wet, it’s cold, and typically tenants don’t tend to move in great numbers at those times of the year. Whereas you used to see this huge spike of demand in the summer.”

The spike, Mr Ibrahim explains, was driven by students, new graduates and their families moving into new homes during the summer holidays for lifestyle reasons. Since they originally moved during that period, it is likely they will continue to move in that same seasonal cycle.

“BTR is quite a nascent sector, and a lot of the providers and the investors have launched BTR products immediately prior to Covid and since Covid, so they’ve enjoyed this unusual period by historical standards, where you get fairly steady demand throughout the year – until last year,” he says.

“And so it’s taken BTR operators a while to understand that they need to be more flexible on price in quarter four and quarter one and if not, their occupancy might be impacted slightly.”

“In the past two years, the leasing market has become much softer”

Some investors and operators that worked in the pre-Covid market have adjusted to the change quickly, while others have not. To compound matters, Mr Ibrahim warns, the seasonal cycle will mean that BTR operators will see a “surge in demand” in quarter two and quarter three, where residents are moving out and moving in simultaneously, presenting “real operational challenges”.

Ms Taylor of Long Harbour echoes the idea that there has been a change in leasing rates since the pandemic. She explains that before Covid, a “normal” lease-up for a new building was between 12 and 20 homes per month. Demand increased post-Covid, with the rate approximately between 15 and 30 homes.

“In the past two years, the leasing market has become much softer, and that’s whether you’re leasing up a new asset, or if you’re trying to lease current assets and look at occupancy,” Ms Taylor says. “We think there’s a few things that are driving that: a lot of people are a lot more cost conscious, just from the cost of living crisis. But in terms of the student accommodation market, we’re seeing that has softened; [fewer] of those people live in our BTR buildings.”