This is more than triple the combined total for 2021 and 2022, according to data from Savills. The surge follows last year’s record £1.9 billion (AUD $3.6 billion) and comes amid soaring rental demand and a growing housing affordability crisis.
Investors are increasingly favouring single-family homes over multi-family developments. These properties are seen as appealing to stable, long-term tenants and are easier to construct under the UK’s restrictive planning laws.
“We believe single-family will be the largest mainstream asset class within [residential],” James Stevens, head of global real estate investment at Aviva told the Financial Times. Aviva has invested £600 million (AUD 1.2 billion) in the sector since 2020.
According to Savills, 54% of rental investment in the year to September went into single-family homes, up from 32% the previous year and just 5% in 2019.
Nearly 5,000 such properties were acquired in the first three quarters of 2024, marking a 20% increase compared to the same period in 2023.
The UK’s institutional players, including Aviva, Legal & General, and Lloyds, have been joined by major international firms such as Blackstone, the world’s largest real estate investor.
Blackstone has acquired 4,500 homes from Vistry since late 2023 in deals worth £1.4 billion (AUD 2.7 billion) and now manages 17,000 UK residential properties.
Critics argue that institutional investments underscore the UK’s housing crisis, where families are increasingly locked out of home ownership and exposed to rising rents.
The Financial Times noted that while institutional investors own only 3% of UK rental homes (compared to 37% in Germany and 41% in the US) concerns remain about affordability and market control.
Institutional buyers have also stepped in to purchase unsold homes from housebuilders struggling with weak demand, often at discounts of 15–20%.
While such discounts narrowed in 2024, developers have adapted by cutting production and partnering more strategically with investors, including selling land and contracting new builds.
Some private equity firms are also building large portfolios with the aim of selling them to pension funds, which value the steady income from rental homes.
Blackstone recently sold 3,000 shared ownership homes worth £405 million (AUD 783 million) to the Universities Superannuation Scheme, the UK’s largest private pension fund, showcasing the potential of this model.
