The UK single family housing market is booming, with the value of deals completed so far in Q1 2023 surpassing the full-year investment total last year, according to Knight Frank’s 2023 Single Family Housing Report.
The company said more than £450m of single family housing deals have already transacted in Q1, compared with the £330m racked up across the whole of 2022.
Knight Frank said a further £8bn of unspent capital is available to be deployed by single family housing investors over the next three to five years, which potentially translates to nearly 30,000 homes at today’s values.
There are currently 9,466 purpose-built rental properties in single family housing schemes, with a further 9,250 homes under construction or having received full planning permission, according to Knight Frank.
Jack Hutchinson in the residential investments team at Knight Frank said: “Despite a growing pipeline, these figures will likely fall short of demand. More than 60% of privately renting households in the UK already live in a house, equating to over three million households. While single family housing delivery is increasing, it accounts for just 11% of the overall BTR delivery to date, and only circa 0.3% of the total number of privately renting households who live in houses, highlighting the scale of the opportunity.”
Oliver Knight, head of residential development research at Knight Frank, said: “Growing affordability pressures, the end of Help to Buy and a structural undersupply of homes in the rented market have culminated in significant tailwinds for the private rented sector. Consequently, single family housing is anticipated to play a far more significant role both in housing delivery and institutional real estate portfolios over the coming years.”
Hutchinson added: “Though single family housing remains in the early stages of its evolution compared with the more mature multifamily market, it is clearly on a rapid growth trajectory. The more challenging economic backdrop makes investing in sectors driven by demographic rather than economic shifts a logical one, and there is a huge opportunity for funders and developers to capitalise on solid near-term and projected long-term demographic trends.”
