George Fraser-Harding was on Covid-19 lockdown in a flat in Paris in 2021 when a series of cross-border video calls took place about where Aviva should invest its cash in the residential property market.

Top investment: Aviva has teamed up with Packaged Living to deliver SFH schemes, with developments including Shenley Wood in Milton Keynes (this image) and Linmere in Houghton Regis, Bedfordshire (below)

The head of pan-European real estate funds at the global asset manager says it had a variety of investment options across Europe but one market really stood out: UK single-family housing (SFH).

Aviva saw that home ownership was becoming less achievable in the UK and that a growing number of families were willing to rent. Encouraged by the growing demand, the asset manager announced a partnership with build-to-rent (BTR) developer Packaged Living in November 2021 and the following summer the pair forward-purchased 195 houses in the West Midlands.

A year later, as inflation and interest rates soared in the wake of the pandemic and Russia’s invasion of Ukraine, Aviva changed the mandates of its core funds so they could pump money directly into UK single-family homes.

By April 2025, it had spent about £575m on 1,500 houses.

It may have been an early mover but Aviva was certainly not alone. Knight Frank estimates that from an extremely low base in 2020, almost £400m was pumped into the nascent SFH sector in 2022, followed by around £1.8bn in each of the following two years. In fact, across 2023 and 2024, investment in SFH was close to half the total cash going into the BTR market.

Jack Hutchinson, partner in Knight Frank’s residential investments team, says appetite has grown just as the opportunity has arisen to break into the sector. “The larger plc housebuilders are much more
open and engaged to doing bulk deals with investors because sales volumes are down due to mortgage rates and the wider economy. But there has also been a growing weight of institutional capital looking to get into SFH. We’re speaking with new investors on a monthly basis who are looking at the sector.”

Big players

Major investors now in the market include Canada Pension Plan Investment Board, which last year formed a £1bn SFH joint venture with Kennedy Wilson; and Invesco Real Estate, which struck a deal this year with Hopkins Homes to bring forward a 99-home scheme in Essex for a German institutional investor.

Hutchinson is not surprised by the investor appetite. “The fundamentals of SFH are really compelling,” he says, pointing out that just 0.2% of rental homes are institutionally owned and managed.

“We’re seeing buy-to-let and private landlords leaving the market in droves, so there is a real opportunity.”

Designed for living: Placefirst’s rental development in Esh Winning, Durham

Hutchinson says there are a number of reasons SFH is “extremely attractive” to investors. “Tenants often tend to be young families who are going to stay in there for longer as they’ve got their children in the local school and so on,” he says. “And your operating costs are quite a bit lower than multi-family.”

BTR specialist Placefirst has almost 4,000 homes in its portfolio, three quarters of which are houses. While it started off bringing vacant properties back to life, the firm now almost exclusively brings new homes to market, both through forward deals with housebuilders and by developing parcels of land it has secured itself.

But chief executive David Mawson admits viability is “challenging” in the current climate of soaring construction costs, forcing it to get more creative. “We have looked at different types of build such as timber frame,” he says.

We’re trying to create areas where people want to live and stay with us
David Mawson, Placefirst

“Our team has to work very hard to make the schemes stack. Rent growth is not as high as it was, but it is consistent. This is a long-term project.”

While he expects more specialists to be drawn into the market, Hutchinson says the skills to build family homes efficiently at scale currently lie with the major housebuilders.

The SFH market has performed strongly in recent years, but Helen Collins, head of UK living and affordable housing at Avison Young, questions whether developers’ willingness to forward-sell homes to single-family investors will wane if demand returns from traditional homebuyers. “When the housebuilders are struggling a bit, there are always more deals done,” she says. “But structurally, I think single-family is here to stay.”

She adds that with the creation of new towns and the general drift to larger sites of more than 500 units, future developments are likely to have a mixed-tenure approach, which will include an element of SFH.

Mawson believes an attitudinal shift to renting in the UK is also helping the sector.

“We are getting generation renters,” he says. “They like the flexibility; they are often renting a better house than they could afford to buy; and they don’t have to put major investment into a property at a time when things are hard.”

Sound of the suburbs

There are further attractions of SFH to developers, Mawson adds. “We’ve had the Building Safety Act come in, which has made high-rise a lot more challenging,” he says. “But besides that, we are a develop-and-hold company. We’re trying to create areas where people want to live and stay with us. Our average length of tenure is approaching three years.”

Collins says red flags for single-family investors would include existing high-quality private rented stock in the area or particularly subdued housing markets. But she adds that, “on a selective basis, it can work anywhere”.

In terms of the types of properties in demand from renters, Collins says it remains traditional family housing. “When people tire of their party lifestyles in the city centre flats, they want a two- or three-bed semi in the ‘burbs,” she says.

While a growing number of investors are entering the SFH market, Collins calls for more capital “of all types” and suggests the Local Government Pension Scheme (LGPS) might pump cash into the sector. “There’s more potential there,” she says. “I’m interested in what might happen with LGPS pooling and more regional investment.”

Mawson says demand for rental homes is particularly high among key workers: more than one in four Placefirst residents fall into this category. “They don’t qualify for social housing, they’re probably not in a position to have saved up £40,000 for a deposit and they want to live in a good-quality, efficient, modern home,” he says.

Housing secretary Angela Rayner this summer revealed plans to develop 300,000 affordable homes over a decade. Collins says she has heard concerns in the industry that this could “squeeze out” privately rented houses, but she disagrees.

When people tire of the city centre, they want a semi in the ‘burbs
Helen Collins, Avison Young

“Every site is different,” she says. “In a lot of markets, you’ll have space for both, and it’s a real benefit to have both.”

Councils agree. Almost four in 10 local authorities have now approved single-family schemes, and 13,000 such homes are under construction across the UK, according to data from Savills.

Mawson believes the sector will continue to innovate to attract tenants. “It wouldn’t surprise me if we looked ahead to two or three years’ time and a resident paid one fee per month to include all bills,” he says.

“The sector is still pretty much in its infancy. There’s a lot of growing to do, but there’s such an opportunity to do it and do it well.”

Aviva continues to grow its portfolio. In March, it invested in its 10th SFH development in partnership with Packaged Living. The money will be used to build 189 homes in Houghton Regis, Bedfordshire.

“We’ve still got money in our funds that wants more exposure to UK SFH,” says

Fraser-Harding. “We might start looking at whether there’s a like-minded partner who’d like to come alongside us, an investor to joint-venture with and have access to some of our built stock but also build out a bigger portfolio together.”

A family affair for Moorfield Group

Family affair: Moorfield recently purchased 32 homes at the Alconbury Weald scheme in Cambridge

Moorfield Group acquired 32 new-build single-family houses in Cambridgeshire this summer.

The firm will operate the buildings, bought from Morris Homes’ 186-residence Alconbury Weald scheme, as rental properties.

They will sit within a 6,500-home masterplan being built out over the next two decades by Urban & Civic close to Cambridge.

The deal takes Moorfield’s single-family portfolio to more than 600 homes, including sites in London, Bristol, Bath and Cambridgeshire.

Moorfield has a three-pronged acquisition strategy. It targets opportunities to cluster groups of units bought from housebuilders; uses technology to identify and purchase homes in individual transactions; and buys former student houses for refurbishment.

The firm has been investing in the single-family sector since 2021 and also looks at co-living, multi-family build to rent, purpose-built student accommodation, retirement living and nursing and care homes.

Co-chief executive Charles Ferguson-Davie says the firm has “high conviction” in single-family housing as part of a focus on living and storage sectors.