Growth of single-family housing investments soars by a factor of five, as per a recent report
In the ever-evolving landscape of the UK's Build-to-Rent (BTR) sector, single-family housing (SFH) is emerging as a significant player. According to a report by Knight Frank, the SFH sector is attracting a growing weight of capital due to its strong fundamentals, with investment volumes showing a notable increase in 2024 and 2025 [1][2][4].
The geographic distribution of the SFR sector is broadening, with institutional investors showing interest in suburban markets across regions like the East of England and West Midlands for large-scale deployment of capital [1]. This trend is reflected in the first half of 2025, where over £800 million was invested in SFH, accounting for a significant share of BTR investment [1][2][4].
Key trends and predictions for 2024 and beyond include a shift in BTR investment towards Single-Family Housing. Although overall BTR investment fell 22% in H1 2025 compared to the previous year, investment in SFH increased, representing around 49-60% of BTR deals and accounting for hundreds of millions of pounds in transactions in Q2 2025 alone [1][2][4].
Smaller deal sizes and sustained interest are also notable features of the SFH market. SFH deals typically involve smaller lot sizes but attract strong domestic and international capital. In Q2 2025, 17 transactions accounted for over £730 million in SFH investments [2].
Difficulties in progressing multifamily schemes and the Gateway planning process have shifted some investment focus toward SFH, which is seen as more viable in the current market environment [1]. New models such as Kettel Homes' £150 million single-family Rent to Own initiative aim to increase supply and provide renters with paths to ownership, reflecting evolving developer and investor strategies within the sector [5].
Areas like Cheshire have shown above-average house price growth (7.1% increase from May 2024 to May 2025), strong demand from first-time buyers, and attractive investment prospects, indicating localized strength in single-family housing markets [3]. The UK Government’s ambitious target of 1.5 million new homes underpins sector optimism, with SFH expected to remain an integral and rapidly deliverable component of the housing mix [2][5].
Industry experts and market data suggest SFH investment momentum will persist throughout 2025 and likely beyond, supported by ongoing capital deployment, residential development pipelines, and innovative housing delivery models [1][2][5]. In fact, Knight Frank predicts that the number of SFR units in the UK is projected to almost triple from the current level of 26,575 homes [1].
Jack Hutchinson, a partner in the residential investment team at Knight Frank, stated that the SFH sector is experiencing significant growth, with investment volumes expected to continue into 2024 and beyond [1]. Furthermore, investors plan to commit £17bn of capital to the SFH sector within the next five years [1]. Oliver Knight, Head of Residential Development Research at Knight Frank, stated that the SFR sector has the potential to significantly contribute to addressing the UK's housing shortage, particularly for families [1].
In 2023, over 6,200 rental homes were acquired or developed through this investment, marking a significant increase compared to the £388m committed in 2022 [1]. Developers and housebuilders are becoming more comfortable with incorporating SFH into their sales and marketing strategies, which is helping to accelerate delivery of much-needed housing.
In summary, while the broader UK BTR market faces some headwinds, investment in single-family housing is a bright spot with increasing volumes, diverse investor interest, and promising growth outlooks through 2024 and 2025, supported by government targets and regional market dynamics.
- The Single-Family Housing (SFH) sector, a significant player in the UK's Build-to-Rent (BTR) market, is attracting growing finance due to its strong fundamentals, with investment volumes showing a notable increase in 2024 and 2025.
- Investors are planning to commit £17bn of capital to the SFH sector over the next five years, reflecting their interest in residential real-estate investments in housing markets across regions like the East of England and West Midlands.
- Key trends and predictions for the future include a shift in BTR investment towards SFH, with hundreds of millions of pounds invested in SFH transactions in Q2 2025 alone, accounting for a significant share of BTR investment.
