Single Family Housing Secures 40% of Build-to-Rent Investment as Investor and Developer Appetite Grows

Posted by Build-Zone on 13th May 2025 -

Since 2023, over £3.6 billion has been channelled into SFH, with 2024 alone witnessing 31 SFH deals, up 24% year-on-year and more than double the number in 2022. Currently, there are more than 14,300 operational SFH units spread across 212 schemes, with a pipeline of nearly 20,000 homes under construction or with planning approval.

Investor interest is increasingly global. According to Knight Frank, £1.06 billion of cross-border capital was invested in SFH in 2024, a 45% year-on-year rise. The UK’s SFH market is becoming a favoured destination for capital from North America, Europe, the Middle East, and Asia-Pacific.

Why Investors Are Flocking to SFH

Knight Frank’s report outlines several compelling reasons behind the surge in SFH investment:

• Deep and underserved demand: With 60% of private renters in the UK living in houses and 3.2 million of them based in suburban areas, SFH meets a critical market need.
• Lower operational costs: With fewer communal facilities to maintain, gross-to-net leakage in SFH is typically just 18-20%, outperforming many multifamily schemes.
• Stable, long-term income: Families renting in suburban areas are more likely to remain longer due to ties to schools and local networks, reducing turnover and void periods.
• Scalable opportunity: Knight Frank has identified potential for over 488,000 SFH homes within the existing planning pipeline, providing a clear route to rapid portfolio expansion​.

A Game-Changer for Housebuilders

Partnerships between SFH investors and housebuilders, both large volume firms and SMEs – are becoming central to BTR delivery strategies. For housebuilders, the SFH boom presents a new way to de-risk developments and maintain healthy cash flow:

• Faster returns: Bulk sales to investors (via forward funding or commitment models) accelerate capital recycling. For example, selling 50% of units on a 300-home site to a SFH investor can reduce sales periods by up to 40%.
• Reduced risk: With construction and land costs often covered by institutional partners, housebuilders can operate with greater financial certainty.
• Market resilience: Unlike open-market sales, SFH schemes do not compete directly, meaning they can operate alongside traditional sale housing without cannibalising demand.
• Surging demand: 71% of UK investors surveyed by Knight Frank plan to target SFH over the next five years, a sharp rise from the 41% already invested​.

Bridging the Rental Gap

With nearly half of UK landlords planning to exit the market due to tax and regulatory shifts, SFH is emerging as a critical solution to plug the growing shortfall in rental housing. In Q4 2024 alone, the number of houses listed to rent was down 29% compared to pre-pandemic averages. As demand continues to outstrip supply, SFH offers the scalability and security needed to respond effectively.

Build-Zone
As one of the UK’s leading structural defects policy providers, Build-Zone recognises the vital role that SFH is playing in reshaping the BTR sector. With favourable fundamentals for both investors and developers, and a clear opportunity to contribute to the UK’s broader housing goals, SFH is set to remain at the heart of residential growth strategies for years to come.

Key Components of Build-Zone Structural Defects Policies:

• 10-year residential development structural warranty, backed by financially secure ‘A’ Rated insurers
• No membership or registration fees
• Part of a Consumer Code
• Accepted by the majority of lenders in the UK and an associate of UK Finance
• Fast quotation turnaround
• Quick response from a professional, nationwide technical auditing/survey service
• Flexible payment method
• Full risk transfer in years 3-10 of cover
• Cover available for new build, conversion, social housing, build-to-rent, major projects and mixed-use developments.
• Cover as standard for alternative accommodation, additional costs, debris removal, and professional fees.

Strong Momentum in Investment – Single Family Housing BTR

Since 2023, over £3.6 billion has been channelled into SFH, with 2024 alone witnessing 31 SFH deals, up 24% year-on-year and more than double the number in 2022. Currently, there are more than 14,300 operational SFH units spread across 212 schemes, with a pipeline of nearly 20,000 homes under construction or with planning approval.

Investor interest is increasingly global. According to Knight Frank, £1.06 billion of cross-border capital was invested in SFH in 2024, a 45% year-on-year rise. The UK’s SFH market is becoming a favoured destination for capital from North America, Europe, the Middle East, and Asia-Pacific.

Why Investors Are Flocking to SFH

Knight Frank’s report outlines several compelling reasons behind the surge in SFH investment:

• Deep and underserved demand: With 60% of private renters in the UK living in houses and 3.2 million of them based in suburban areas, SFH meets a critical market need.
• Lower operational costs: With fewer communal facilities to maintain, gross-to-net leakage in SFH is typically just 18-20%, outperforming many multifamily schemes.
• Stable, long-term income: Families renting in suburban areas are more likely to remain longer due to ties to schools and local networks, reducing turnover and void periods.
• Scalable opportunity: Knight Frank has identified potential for over 488,000 SFH homes within the existing planning pipeline, providing a clear route to rapid portfolio expansion​.

A Game-Changer for Housebuilders

Partnerships between SFH investors and housebuilders, both large volume firms and SMEs – are becoming central to BTR delivery strategies. For housebuilders, the SFH boom presents a new way to de-risk developments and maintain healthy cash flow:

• Faster returns: Bulk sales to investors (via forward funding or commitment models) accelerate capital recycling. For example, selling 50% of units on a 300-home site to a SFH investor can reduce sales periods by up to 40%.
• Reduced risk: With construction and land costs often covered by institutional partners, housebuilders can operate with greater financial certainty.
• Market resilience: Unlike open-market sales, SFH schemes do not compete directly, meaning they can operate alongside traditional sale housing without cannibalising demand.
• Surging demand: 71% of UK investors surveyed by Knight Frank plan to target SFH over the next five years, a sharp rise from the 41% already invested​.

Bridging the Rental Gap

With nearly half of UK landlords planning to exit the market due to tax and regulatory shifts, SFH is emerging as a critical solution to plug the growing shortfall in rental housing. In Q4 2024 alone, the number of houses listed to rent was down 29% compared to pre-pandemic averages. As demand continues to outstrip supply, SFH offers the scalability and security needed to respond effectively.

Build-Zone
As one of the UK’s leading structural defects policy providers, Build-Zone recognises the vital role that SFH is playing in reshaping the BTR sector. With favourable fundamentals for both investors and developers, and a clear opportunity to contribute to the UK’s broader housing goals, SFH is set to remain at the heart of residential growth strategies for years to come.

Key Components of Build-Zone Structural Defects Policies:

• 10-year residential development structural warranty, backed by financially secure ‘A’ Rated insurers
• No membership or registration fees
• Part of a Consumer Code
• Accepted by the majority of lenders in the UK and an associate of UK Finance
• Fast quotation turnaround
• Quick response from a professional, nationwide technical auditing/survey service
• Flexible payment method
• Full risk transfer in years 3-10 of cover
• Cover available for new build, conversion, social housing, build-to-rent, major projects and mixed-use developments.
• Cover as standard for alternative accommodation, additional costs, debris removal, and professional fees.

Discover more on our structural defects policies.