BLOGS

Institutional capital hasn't left London — it's just being more selective

London's development pipeline has had a tough couple of years. Build cost inflation, higher interest rates and cautious mortgage lending have slowed conventional for-sale schemes across the capital. Yet build-to-rent (BTR) and purpose-built student accommodation (PBSA) continue to move through planning committees at a steady clip.

REalyse planning data shows a consistent run of large-scale BTR and co-living consents granted across London over the past two years, spanning boroughs from Ealing and Southwark to Greenwich, Tower Hamlets and the City of London. Several of the largest schemes granted detailed planning permission carry unit counts well into the hundreds, with some approaching or exceeding 500 BTR units in a single consent. This suggests institutional investors and operators are still prepared to commit capital to London residential — provided the asset class, location and income profile stack up.

Where approvals are landing

The geography of recent approvals tells its own story. Outer and middle-ring boroughs — Ealing, Greenwich, Bexley, Barnet and Haringey — feature heavily among recently granted schemes, often on regeneration or conversion sites rather than prime central locations. This lines up with a broader institutional preference for sites offering scale, established transport connectivity, and land values that support BTR's longer investment horizon.

Notable examples from REalyse's planning dataset include:

• A 277-unit BTR scheme in the City of London granted detailed consent, underlining that BTR is not confined to zone 3–6 regeneration areas.

• A co-living and student-oriented scheme in Southwark combining several hundred studio units with residential and light industrial space — reflecting how mixed-use consents are increasingly used to unlock stalled sites.

• Masterplan-scale regeneration, such as the Winstanley & York Road estate in Wandsworth (over 2,500 total units) and the Gurnell redevelopment in Ealing, both securing outline consent — a sign that local authorities remain willing to back large, phased residential-led schemes when they include affordable and rental tenure.

• Purpose-built student accommodation activity in Ealing, including a scheme near North Acton, pointing to continued demand for PBSA close to university clusters and strong transport links.

Planning stages vary — some sites hold outline consent, others have full detailed permission — but the throughput itself is the headline: London boroughs are still granting substantial BTR and student housing volume, even as overall residential permissions have softened nationally.

The yield case still stacks up

Gross rental yield is the metric institutional investors watch most closely when weighing BTR against alternative uses of capital. REalyse rental listings data across BTR-flagged stock shows average gross yields clustering around the high-5% to 6% mark, with a meaningful spread — some areas post yields above 9%, typically smaller, more affordable rental products in outer London and commuter-adjacent locations, while higher-value central schemes sit lower on yield but benefit from stronger capital growth and tenant demand resilience.

Average asking rents on BTR stock in the dataset sit in the region of £1,500–£1,850 a month, though this varies significantly by location, unit size and specification. For investors underwriting new schemes, this is the kind of granular, area-level comparable data — asking rents, achieved rents, and yield benchmarks — that turns a planning consent into a bankable income assumption.

What this means for developers, lenders and investors

The pattern emerging from planning and rental data supports a fairly consistent institutional thesis: BTR and student housing remain among the few residential asset classes still attracting consistent capital deployment in London, even as build-to-sell volumes cool.

For developers and joint venture partners, this means viability cases anchored in rental income — rather than open-market sale values — are more likely to clear planning and secure funding in the current climate. For lenders and credit teams, comparables drawn from granted schemes and achieved BTR rents offer a firmer basis for underwriting than relying on asking prices alone. And for investors screening sites, the concentration of recent approvals in outer and middle-ring boroughs suggests where planning risk is currently lower and where operational scale is easiest to achieve.

Outlook

None of this points to a booming market — approval volumes and total unit numbers remain below the highs of a few years ago, and financing conditions are still tighter than developers would like. But the steady cadence of large BTR and student housing consents across a spread of boroughs suggests the asset class has proven its resilience through a difficult cycle.

As more schemes move from outline to detailed consent and into delivery, the next test will be absorption: whether rental demand and achieved rents keep pace with the growing pipeline. That's where ongoing tracking of planning status, rental comparables and yield trends becomes essential for anyone underwriting the next wave of London BTR and student housing investment.