What the Rent Reform Act could mean for developers and investors

The government’s Rent Reform Act is set to reshape the private rental sector, but its knock-on effect on development finance may be just as significant.

At the heart of the reforms are measures to increase tenant protections and limit landlords’ ability to raise rents or regain possession. While this is intended to improve housing security, it has major implications for yield calculations and investor appetite.

For developers, particularly those targeting build-to-rent schemes, the Act could mean tighter margins. Valuers will inevitably adopt more cautious assumptions on rental growth, and lenders may scrutinise cash flow more closely when structuring debt. For investors, the appeal of long-term, stable rental income remains, but the growth story looks more muted.

The likely result is increased reliance on providers who can take a more nuanced view of risk and structure around potential reforms. We may also see more developers pivot toward schemes with mixed tenure, including private sale and affordable components, to balance income risk. Developers and investors who can adapt their assumptions, and partner with platforms able to respond quickly, will be best positioned. At Imperial Blue Finance we understand how regulatory change affects appraisals and lending appetite, and we offer loans structured flexibly for developers balancing BTR and mixed-tenure strategies.