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Big money to spend £17 billion in South and Midlands building rental houses

single family housing

Private landlords face a significant increase in competition from corporate operators as investors reveal a £17 billion, 60,000-home building programme concentrated on the South and Midlands.

The figures have been published by leading estate agency Knight Frank after quizzing 20 of the biggest ‘build to rent’ investors about their plans for the next five years to build ‘single family homes’ or, in plain English, houses for families rather than flats for single, young renters.

While corporate cash has traditionally targeted young professionals in urban areas of the UK’s big cities with apartments, big-money investors are now targeting other areas of the rental market including single family homes, which has seen the number of homes built treble since 2018 (see graph).

This kind of build to rent has seen huge increases in cash pouring into sites in more suburban and even rural areas, rising from £388 million in 2022 to £1.9 billion last year.

Many built to rent operators have in the past openly criticised the quality of housing stock provided by private landlords and see their ‘offering’ as being more attractive to renters, many of whom struggle to find properties to rent in today’s restricted-supply market. But Research published last year showed the BTR sector's claims aren't always true.

Knight Frank says much of the growth of the single family market comes from City money hoovering up large chunks of – and sometimes entire – housing estates being built by developers.

Housing shortage

Oliver Knight (pictured) Head of Residential Development Research at the estate agency, says: “Our research provides clear evidence of the opportunities for single family rental housing to play a key role in addressing the UK's housing shortage, particularly for families.

“The geographic distribution of the sector is broadening as institutional investors increasingly eye suburban markets across regions like the East of England and West Midlands to deploy capital at scale.

“Higher interest rates and the removal of government support for first-time buyers mean the aspiration of homeownership has become increasingly distant for many.

“The result is a sharp increase in demand for good quality rental housing from long-term renters.”

What does build to rent mean for buy to let?


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