Single Family Housing (SFH) has been the subject of recent media attention, with the likes of Goldman Sachs, Legal & General, Aviva and Blackstone entering the UK market, and major housebuilders adapting their business models to include an SFH product. Although this type of housing is still in its relative infancy, over £1bn was invested in SFH last year, with significant growth projected for the year ahead. The launch of the UK Single Family Association towards the end of 2023 is further evidence of the increasing momentum within the sector.

Single Family Housing is the suburban version of Build-to-Rent (BTR) city centre apartments. Generally taking the form of traditional low-density family houses, SFH offers many of the same benefits seen elsewhere in the BTR sector, such as access to local amenities and communal space, and high-quality management and specification.

From what we have seen so far, SFH also offers the opportunity for higher levels of sustainability than ‘for sale’ housing products. With investors looking to retain the asset in the longer term, higher up-front costs associated with investing in sustainable features such as PV panels, air source heat pumps and EV charge points, is of benefit later down the line as houses are more likely to retain their value. Tenants are also increasingly likely to demand these features from their homes and may be willing to pay higher rents where they are provided. This can then be offset against a reduction in their energy bills.

The recently released Competition and Markets Authority report into housebuilding made for somewhat bleak reading. One if its key findings was that developers build houses at a rate at which they can be sold without needing to reduce their prices; rather than diversifying the types of homes they build to accommodate different communities; and that incentives are needed to overcome this. Against this backdrop, SFH can help to accelerate the delivery of larger sites by offering a different tenure type where houses can all be sold at once by a housebuilder to an investor/operator.

Either by choice or through necessity, more people than ever are renting their homes, and SFH provides a greater level of quality and stability to renters of traditional houses compared to the buy-to-let market. While by no means a solution to the housing crisis, it is an integral piece of the puzzle, and hopefully here to stay.

Iceni have experience advising on SFH schemes across the country. Get in touch if you think we may be of assistance.