The UK’s new towns will favour build-to-rent developers rather than private landlords, according to a think tank which labels them “profit-seeking institutional investors”, often based overseas.

The Common Wealth’s report, Open for Business or Up for Sale, says corporate landlords could be given a large chunk of land in the 12 towns, allowing them to deliver as much as a fifth of the expected 10,000 properties in each location.

“Housing in the sector also skews toward households on above average and higher incomes, with industry data showing households in BTR are much more likely to be on incomes of over £68,000 a year than the average for the private rental sector,” the report says.

Marcus Dixon (pictured), head of residential research at JLL consultants, tells The Telegraph that in every new town, about 2,500 homes will be build-to-rent properties managed by big institutional landlords.

He says: “I don’t see how the government gets anywhere near the housing numbers and the rate of delivery that they want without build-to-rent being a significant part of the solution.”

Build-to-rent developers are typically backed by pension funds and institutional investors, which are much wealthier and more powerful than traditional buy-to-let landlords. Dixon adds: “Historically, if you were looking at increasing sales rates, you would have had your buy-to-let investors. Really, build-to-rent investors are almost replacing what we would see as the traditional buy-to-let market.”

Doubled

The number of completed build-to-rent units has doubled since 2021 and now totals 110,000, according to JLL.

Angela Rayner has expressed support for build-to-rent in the past, while build-to-rent expertise features prominently in the new towns taskforce.

Its members include Helen Gordon, the chief executive of Grainger, Britain’s largest listed residential landlord, and Bill Hughes, at L&G, which has invested more than £3 billion in developing thousands of build-to-rent homes.