More than £7bn was invested in the single-family housing (SFH) market between 2020 and 2025, according to agency Knight Frank. And a significant amount of that – £2.6bn – was deployed last year alone.

Family ties: Aviva Investors forward-funded an SFH development in Houghton Regis as part of a partnership with Packaged Living

In fact, SFH investment overtook multi-family housing (MFH) investment for the first time in 2025 and is expected to lead living sector deal volumes again this year.

Aviva Investors is among those that have heavily invested in this market. It owns 11 SFH developments in the UK, which have a combined gross asset value of more than £850m.

Its SFH deals include forward-funding the development of 189 homes in Houghton Regis, Bedfordshire, as part of a partnership with Packaged Living.

Seán Moran, head of UK investment at Aviva Investors, has overseen the firm’s SFH investment for the past six years and says the market remains one of its “top sectors with regards to future deployment”.

In May, build-to-rent (BTR) specialist Moda and CBRE Investment Management (IM) launched an SFH fund, which completed its first deal in July, bagging a 222-home portfolio from Bellway. It already has three operational sites generating returns.

There’s a major imbalance between supply and demand for good-quality homes in the UK
Johnny Caddick, Moda

Moda chief executive Johnny Caddick says the financial argument for pursuing SFH is strong in the current market. “There’s a major imbalance between supply and demand for good-quality homes in the UK, and that’s particularly acute when you look at houses for rent,” he adds.

Against a backdrop of stagnant wage growth and high interest rates, purchasing a property has become much harder for first-time buyers. But young cash-strapped couples are not the only ones driving the SFH trend. ‘Generation rent’ has matured, resulting in a shift in attitudes, particularly among younger generations who no longer automatically see renting as a stopgap before buying.

Andrew Davey, managing director, head of UK residential, at CBRE IM, says: “Many renters who started out in multi-family apartments a decade ago now have families and are looking for larger homes with gardens, access to good schools, local amenities and strong transport links.”

Branching out: Moda and CBRE IM’s SFH fund acquired Fallow Wood View in Burgess Hill, West Sussex, from Bellway

As experienced renters, these groups increasingly expect the same high-quality service and professional management they received in MFH schemes, which is where institutional investors and operators can add real value.

Kate Brennan, partner for operational living at property adviser Bidwells, says the fact that around 38% of renters living in SFH have children is beneficial for landlords. “Families tend to move less so tenancies run longer, voids can be shorter and income therefore has greater stability,” she explains.

Brennan points out that SFH schemes now exist in nearly 32% of local authority areas, a figure that is expected to grow to 35% once the developments currently in the pipeline are completed.

Looking ahead, she says growth is likely “to be characterised as much by the sector spreading into new markets as by additional capital entering existing ones”.

Income opportunity

Sluggish house sales are also creating opportunities for investors to secure bulk discounts from housebuilders struggling to hit their sales targets. “They get certainty of sales and we can put capital to work, get homes into the rental market and start generating income very quickly,” Caddick says. “It’s a model that can deliver at real pace and scale.”

Andy Pointon, partner and head of BTR investment and development at Allsop, says all the major housebuilders are willing to sell properties in bulk to rental investors. “Barratt, Taylor Wimpey, Vistry, Persimmon, Bellway and Miller Homes – to name just a handful – have seen how incorporating SFH into a mixed-tenure strategy can complement their core business,” he adds.

The product is winning, and there simply isn’t enough of it
Dan Valenzano, Greykite

Over the past 18 months, property investment firm Greykite has acquired more than 1,000 purpose-built single-family rental homes from housebuilders Keepmoat, Barratt Redrow and Persimmon.

Greykite senior partner Dan Valenzano says such deals are mutually beneficial. “We look at this market as a symbiotic relationship between the single-family BTR investors like ourselves and housebuilders, which are often judged in the public markets by the number of homes they’re selling,” he explains. “In exchange for these bulk purchases, we typically get a double-digit discount compared with open-market values.”

Although discounts are expected to get smaller as the sales market recovers, the lower risk profile of single-family investment relative to other real estate sectors is a notable draw. Pointon says SFH schemes typically have high occupancy levels, benefiting from a wide resident target demographic and a nationwide shortage of homes. Buying stock from housebuilders is also easier for investors compared with buying and developing sites themselves.

Single-minded: Greykite has bought homes in bulk from leading housebuilders including Persimmon

Meanwhile, the phased nature of SFH development allows investors to start generating income before an entire scheme is complete. Pointon says the first homes on a development are typically handed over within around six months, with further units released in batches thereafter.

“This means a steady stream of properties is released into the rental market, allowing demand to be absorbed slowly without placing pressure on rental values, while helping to align investment returns with developers’ pricing expectations,” Pointon says.

Investment hotspots

Two- and three-bedroom homes tend to work best from a rental investment perspective and, geographically, commuter locations remain the obvious investment hotspots, Caddick says.

But he adds: “You’re not just looking at the major cities. There are good rental markets in towns and smaller communities all over the country where people want a house, a garden and access to schools, jobs and transport, but where the professionally managed rental offer is still pretty limited.”

Greykite’s strategy has focused on less established locations typically in the North with the strongest house price growth. “We’re taking a little bit more risk in terms of the exit liquidity, given the locations that we’re investing in, but in exchange we’re getting a commensurately higher yield on our investment,” Valenzano explains.

“Whenever we invest in sites, we look at the bigger picture: demographics, economic growth characteristics and projections, but also micro market dynamics like local amenities, infrastructure, Ofsted-rated schools, transport links, employment drivers. We want to tick all those boxes.”

Incorporating SFH into a mixed-tenure strategy can complement the core business of housebuilders
Andy Pointon, Allsop

Aviva Investors’ Moran says the firm often adjusts the spec of off-the-shelf housing from housebuilders to meet the requirements of the rental market. Upgrades it makes include installing solar panels and battery storage. Some of its properties also come with a five- to 10-year zero-bills commitment, thanks to a deal struck with energy provider Octopus.

The upfront investment more than pays off, according to Valenzano. “These homes generally lease up in a matter of weeks,” he says. “People are willing to pay a little bit more for purpose-built, energy-efficient, new single-family rental housing than your typical existing buy-to-let rental stock across the country. The product is winning, and there simply isn’t enough of it.”

Moran says efficient and professional management of SFH properties is also important, adding that Aviva Investors works with Colby River for operational day-to-day management of its homes.

There is also confidence that the government’s commitment to ramping up housing supply over the next decade, including building 70,000 social and affordable homes under the Social and Affordable Homes Programme, won’t derail the investment case for SFH, given current supply-side issues.

“I don’t think it will dent confidence in the market, because the underlying fundamentals are so clear,” Caddick says. “The challenge will be getting enough homes built. Planning, land, build costs and the time it takes to get from having capital ready to invest to putting a home on the ground – those are much more immediate constraints.”

Valenzano says that what continues to attract investors to this part of the market is the “predictability and reliability of the cashflow” as well as the long-term growth potential. He adds that the newly built homes section of the rental market remains “a pretty compelling proposition”.

Single-family housing puts down roots

In August, Border to Coast’s UK Real Estate Fund acquired 866 suburban rental homes from Leaf Living, the single-family housing (SFH) platform founded by Blackstone and Regis. The properties, located across 12 developments in the South East, have a combined value of around £400m, making it the largest SFH deal of 2026.

Leaf Living chief executive Will Montague believes the deal demonstrates the faith that institutional investors have in the professionally managed rental market.

“The market has seen a growing number of housebuilders incorporate institutional partnerships into their delivery strategies, recognising the role that long-term capital can play in accelerating delivery and greater certainty throughout the process,” he says.

“Overall, these trends point to a market that is increasingly liquid and sophisticated, attracting investment that is seeking stable, extended exposure to the UK living sector.”