Are You a Build-to-Rent Landlord Without Even Realising It?
Are You a Build-to-Rent Landlord Without Even Realising It?
Unless you work in the finance industry, investments can carry an aura of mystery, especially pensions. There are so many questions: where does my cash go, who manages my money, can my pension lose value?
Property over pensions
Multiple unknowns, a lack of understanding and historic pension scandals are some of the reasons why investors have turned to the private rental market as an alternative. In comparison to pensions, bricks and mortar is easier to understand, provides a tangible asset, and can provide both short-and long-term gains.
Since 2020, however, tax and compliance reforms have changed the viability of buy-to-let, squeezing profits and edging out less experienced (and less bullish) landlords. In fact, TwentyEA continues to track an increasing number of landlords who are selling up.
Landlords losing faith
Quantifying the trend, the data experts found 9.8% of all new sales instructions in Q1 2024 previously operated as buy-to-lets. This figure soared to 15.6% of all new instructions in Q1 2025. Tellingly, analysis found of all the properties sold in Q4 of 2024, only 2.9% were bought by fellow landlords who went on to relist the properties as rentals.
These figures, however, do not mean there are less landlords operating in the lettings sector. On the contrary! There are many new landlords entering the industry, and the momentum is coming from the Build-to-Rent market.
Pension fund investment worth examining
It’s here we circle back to pensions. The fundamental principle of pensions is to take money from people and invest it for long-term gains. It is the job of pension managers to choose investments wisely and in the last few years, the spotlight has fallen on Build-to-Rent.
Experts feel the move towards building volumes of new homes specifically for private tenants – properties owned and managed en masse by corporate vehicles and not by individual landlords – can return exceptional yields and deliver tantalising appreciation prospects.
The charge has been led by Nest – the public body that runs workplace pension schemes. In 2024, it announced it would invest up to £1 billion in Build-to-Rent properties alongside a new partnership with Legal & General (L&G) and Dutch pension investor PGGM.
Nest is one of the UK’s largest workplace pension providers, with at least 13.5 million pension holders. Its investment into Build-to-Rent means millions of people are, by default, small scale landlords just by paying into a workplace pension.
It was in April 2025 that the enormity of Nest’s Build-to-Rent activity became apparent. An Inside Housing article on the rise of Build-to-Rent reported how investment in the sector had reached £1.4 billion in the first quarter of 2025. The granular detail revealed the most valuable deal was Nest’s £160m project with L&G and PGGM to forward fund 494 Build-to-Rent apartments in Manchester.
A growing trend
Nest is not the first pension provider to invest heavily in Build-to-Rent. A trawl back through the news archives reveals a joint statement by Canada Pension Plan Investment Board (CPP) and property and infrastructure group, Lendlease, made back in 2018.
It announced the launch of a major Build-to-Rent investment partnership, with an initial pledge to invest £1.5 billion in the sector. Now known as LRIP LP, its flagship Build-to-Rent development forms part of Elephant Park – a £2.5 billion regeneration project in London, with Park Central West and Park Central East also in its portfolio.
Forward funding in fashion
Pension Insurance Corporation plc (PIC) was another early adopter of pension-funded Build-to-Rents, buying its first site back in 2020. Since then, PIC’s online news centre has been full of positive announcements.
Headline investments using pension pot money include £200 million to forward fund One Eastside in Birmingham – the tallest Build-to-Rent tower to be built outside of London; £90 million invested in a 278 apartment Build-to-Rent development in Ealing and the £80 million redevelopment of a brownfield site in Milton Keynes. With each wave of funding, another pension holder shares in the success of becoming a landlord.
The phasing out of private landlords?
The trend for pension providers working towards becoming the industry’s biggest landlord group has not gone unnoticed. Last year, Charlie Bryant – the CEO of Zoopla’s parent company Houseful – spoke openly, claiming pension funds and investment firms will be tomorrow’s landlords.
Quoted in The Telegraph, Bryant said: “This shift comes as the Government has vowed to amend planning rules to build 1.5 million homes, potentially favouring corporate Build-to-Rent investors who can develop and manage apartment blocks with economies of scale.”
“Undoubtedly the next iteration of the rental market will be larger, more corporate institutional landlords under the Build-to-Rent guise, particularly with potential planning changes.”
Increasing amounts being invested
The latest Knight Frank Build-to-Rent report illustrates just how much of our money is being pumped into this burgeoning sector. Investment in UK Build-to-Rent exceeded £5 billion for the first time in 2024. It was the fifth consecutive record year for investment, and a figure that was up 11% from 2023.
So, at a time when interest in the private rental market is reportedly waning, as a pension-paying country, we should actually be paying more attention to lettings success than ever. Larger and larger chunks of pension pots – funded by you, me and those with zero connection to the lettings industry – are fuelling the spectacular rise of Build-to-Rent.
If you have a pension, it is highly likely the financial health of your future will depend, in part, on the success of Build-to-Rent. So, if you never in your wildest dreams thought you’d own an investment property, there may be a small slice of you that is already a landlord.
