Single family housing secures 40% of build-to-rent investment as investor and developer appetite grows
Build-Zone reports on the rapid growth of single family housing (SFH) within the UK build to rent sector, drawing on research by Knight Frank.
More than £3.6 billion has been invested in SFH since 2023. There were 31 SFH deals in 2024, up 24% on the previous year and more than twice the 2022 total. Over 14,300 SFH homes are now operating across 212 schemes, with almost 20,000 more under construction or consented. Cross-border investment reached £1.06 billion in 2024, a 45% increase, with capital coming from North America, Europe, the Middle East and Asia-Pacific.
Knight Frank identifies several reasons for investor interest. Some 60% of private renters live in houses, 3.2 million of them in suburban areas. Operating costs are lower because there are fewer shared facilities, with gross-to-net leakage typically 18% to 20%. Families tend to stay longer because of schools and local ties, reducing turnover and voids. The existing planning pipeline could accommodate more than 488,000 SFH homes.
For housebuilders, both volume firms and SMEs, partnerships with SFH investors offer faster capital recycling through bulk or forward-funded sales. Selling half the homes on a 300-unit site to an investor can shorten the sales period by up to 40%. Institutional funding can reduce risk, and SFH homes do not compete directly with open-market sales. According to Knight Frank's survey, 71% of investors intend to target SFH within five years, compared with 41% already invested.
The sector is also seen as a response to shrinking rental supply. Nearly half of landlords plan to leave the market because of tax and regulatory changes, and houses listed to rent in Q4 2024 were 29% below pre-pandemic levels.
Build-Zone, a structural defects insurance provider, notes that its 10-year warranties cover new build, conversions, social housing, build to rent, mixed-use and major projects.
