The has been a rise in smaller build-to-rent developments as small and medium-sized enterprise (SME) property developers continue to move into the rental market, research from Rangewell revealed.
The report found that many of these new rental homes do not appear on commercial property portals but are making a big impact on local rental supply.
Between April 2021 and October 2024, around 290,000 rental homes were sold in England and Wales, according to Savills.
Rising interest rates, higher Stamp Duty and more regulation led many amateur landlords to leave the market.
Two-thirds said mortgage costs were their main reason for selling.
This has reduced rental supply and pushed rents up by 9% in the year to the end of 2024.
Rangewell’s analysis of Valuation Office Agency council tax data and Land Registry completions showed strong build-to-rent activity.
In the last two years, Leeds saw an estimated 7,780 new potential build-to-rent homes, Birmingham 6,730, Salford 6,470 and Manchester 5,570.
Cornwall added 5,590 new homes.
The South East led with 85,420 new dwellings, followed by London with 73,370, the North West with 57,230 and the West Midlands with 46,600.
The North East and Wales saw smaller increases.
Alasdair McPherson, commercial property expert at Rangewell, said: “We’re witnessing a fundamental shift in the rental market.
“As amateur landlords retreat, professional SME developers are stepping in with purpose-built rental properties, professional management standards and business discipline.
“These developers are the unsung heroes of the housing crisis, creating 6-25 unit schemes in neighbourhoods that institutional players overlook, converting older buildings, and delivering homes where people actually want to live.”
McPherson added: “They can move quickly, finance projects efficiently and adapt to local market conditions in a way that larger funds cannot.
“Our research suggests that hidden Build to Rent activity could be ten to fifteen times greater than the volume visible on commercial portals.
“For investors, this is where the real opportunity lies, but it requires specialist finance to unlock.”
