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The UK is at a critical juncture in addressing its long-standing housing undersupply. While the challenge of meeting housing demand is not breaking news, the scale of the shortfall keeps making headlines.

In 2024, a shake-up in how housing need is calculated pushed the government's annual target to a bold 370,000 homes - a 20% jump from the previous benchmark. Ambitious? Absolutely. But let's be clear: the UK hasn't built at this pace since the late 1960s.

If we're serious about unlocking economic growth and making housing more accessible, we need a smarter, more scalable strategy. That means building where demand is surging - and today, that's in our cities. With urban living on the rise, the build-to-rent (BtR) sector is perfectly positioned to lead the charge.

Chart 1: Annual housing completions

Investing and planning to meet housing targets

Meeting national housing targets requires action across all tiers of governance and investment. National policy must provide the enabling framework, regional authorities must align infrastructure and planning priorities, and local councils must accelerate approvals and unlock land. At the same time, institutional capital - particularly from local government pension schemes (LGPS) -must be mobilised to support long-term, scalable development. Developers also have a pivotal role to play in delivering housing and responding to shifting demand dynamics.

With urbanisation driving housing demand, the BtR sector stands out as a key delivery mechanism that's capable of providing high-quality, professionally managed housing at scale. A step-change in delivery is not optional, it's essential. Unlocking land, streamlining planning, and mobilising long-term capital must now become national priorities.

Local versus national housing targets

National housing targets are coordinated by central government policy; they're based on broad long-term growth rates and affordability ratios. The government aims to tackle the housing crisis by building 1.5 million homes by 2030. It will use planning reforms to unlock greyfield and brownfield land[1], while significantly expanding affordable and social housing. One challenge of a predominantly national approach is that housing targets are often set using broad criteria, which may not fully capture local nuances and needs.

Over the long term, they can fail to consider the economic and social impacts that well-targeted and appropriate levels of housebuilding can have at a local level. Some regions can be left behind.

Focusing on local needs

In contrast, local housing delivery is led by local authorities and region-specific entities. These are much more concentrated on local city, town and regional housing needs, often considering local economic growth and regeneration agendas.

Perhaps the most powerful point about locally anchored strategies is that they don't have to be mutually exclusive with national targets. In fact, central policy is already working to empower local authorities to deliver social housing, using national targets as a framework[2]. Local authorities can come under considerable pressure to meet these targets, leading to tensions when national expectations don't align with local needs or capacities. Therefore, local targets can more effectively leverage the motivations of local authorities, who can be the foremost institutional investors[3], given the scale and influence of LGPS.

LGPS can be the firepower that housing needs

The 86 local authority pension funds in England and Wales now invest through eight main LGPS (ACCESS Pool, Border to Coast, Brunel, LGPS Central, LPP, London CIV, Northern LGPS, and Wales Pension Partnership). With these pools soon consolidating from eight to six, this shift will deliver even greater concentrated firepower. It will be possible to mobilise large-scale investment with enhanced professional oversight and strategic focus. Through this collective strength, current total LGPS assets of nearly £400 billion are set to grow to £1 trillion by 2040[4]. As these pools look to invest more into housing, this approach could support the delivery of up to 80,000 homes across the UK, according to research by Savills[5]. This represents around 60% of current BtR stock, which suggests the speed of delivery could really accelerate. 

Chart 2: Cumulative delivery of Build-to-Rent units from 2013 to 2025

 

How can LGPS help the housing crisis?

Not only do LGPS pools have considerable financial firepower, they also have traits that make them uniquely suited to national housing initiatives.  

Working in partnership for BtR housing

While LGPS pools possess critical mass, there is substantial value and capability to be added from private capital.

Aberdeen can use the scale of LGPS pools to deliver high-quality rental housing that supports both local communities and national policy targets. Leaning on our existing relationships, we can comingle additional funding, use our own sector-specialists, and bring in operational expertise, all while improving resource efficiencies. We can then use this scale to diversify and deploy capital into smaller catchments, which would otherwise be unreachable by institutional investment.

Working with the John Lewis Partnership, we can go one step further by unlocking well-located city-centre locations for redevelopment. This will deliver much-needed housing in urban markets through a nationally recognised and trusted brand. By adding existing BtR assets across local authorities, we can cement local goals while servicing national housing targets.

Final thoughts...

The net result of partnering with local authorities means that locally driven housing initiatives can be delivered at scale across regions. We can blend fiduciary duty with social outcomes that neither local authorities nor the private sector could fully accomplish alone.

By helping to facilitate public-private partnerships, we can increase collaboration among pension pools and make national-level housing targets more achievable.  

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Record volatility amid an ASX reporting season delivering another year of flat-to-negative growth. Australian GDP in the June quarter compared well with peers but on a per capita basis things have been going backwards since Q4 2022. Things have been going more backwards for the Alcohol & Tobacco space (and related ASX listings). Back on equities, large cap and momentum were leading factors in the US over the past 12 months (the AI theme having a bit to do with that) but in Australia it is small caps out in front. US smalls - and also bonds - remain in lengthy drawdown periods. Looking more broadly, delinquencies in the US office CMBS sector have been on the rise, while a large portion of private equity buy-out holdings are in breach of leverage caps. Finally, take a look at the price of diamonds falling away.

September 2025 Edition

 

ASX reporting season featured record result-day share price volatility

 

Source: Wilsons

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Three years of flat-to-negative earnings growth in Australia projected to end in FY2026

 

Source: Wilsons Advisory

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Australian gross operating profits: mining industry v the rest

 

Source: IFM Investors, ABS

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June 2025 quarter GDP growth - quarterly change annualised

 

Source: Macrobond, AMP

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Real & real per capita growth in GDP

 

Source: IFM Investors

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Australian household spending - alcohol & tobacco has been in decline for ~24 months

Source: Evans & Partners

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Performance of ASX-listed alcohol stocks

 

Source: Koyfin, Equitable Investors

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US factor ETF performance / S&P 500 ETF performance over past 12 months

 

Source: Koyfin

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ETFs tell a bit of a different story on the ASX over the past 12 months

 

Source: Equitable Investors

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AI "Picks & Shovels" Equal Weight Index - rebalanced monthly

 

Source: Bespoke

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Number of says since Russell 2000 (US small cap index) last surpassed its prior high (drawdown)

 

Source: Charles Schwab

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Number of months since Bloomberg Aggregate Bond Index last surpassed its prior high (drawdown)

 

Source: Creative Planning, @CharlieBilello

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US Office CMBS delinquency rate (%)

 

Source: Trepp, The Kobeissi Letter

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% of private equity buyout holdings in breach of leverage caps

 

Source: MSCI, Bloomberg via Advisor Perspectives

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Diamond prices in decline

 

Source: IDEX