The private rented sector
The Government has set ambitious commitments for the residential sector; namely, the delivery of 1.5million homes by 2029, and the market - including the new build, private rented sector - is responding.
PRS is now the second-largest tenure in England, increasing from 3.1 million households in 2008-09 to 4.7 million in 2023-24 - an uplift of 52%.
This increase has been driven by:
- affordability pressures (the home ownership affordability ratio has more than doubled from 3.54 in 1997 to 7.9 in 2024)
- increased demand for flexible living
- and demographic shifts, and specifically more single-person households.
Whilst the PRS has grown overall, the shape of the sector itself is changing. A third of all private landlords (35%) have either sold up (19%) or actively tried to sell (16%) in the last 12 months, largely due to tax changes, economic headwinds and increased regulation (Building Safety Act (2022) and Renters Rights Act (2025)), and subsequent delays by the Building Safety Regulator.
This has led to an opportunity for the increased growth of the Build to Rent (BTR) sector, where residential properties are developed specifically for renting, rather than selling, and are managed by a single entity.
Changes within BTR
The growth of the BTR sector has been observed over the past decade, with a noteworthy shift in recent years from ‘multi-family housing’ (MFH) - often apartments in higher-rise, higher-density developments - to single-family housing (SFH), principally houses or low-rise apartments.
Of the £5.3billion invested into BTR in 2025, £3.17billion was deployed into SFH, resulting in SFH accounting for 55-59% of total annual investment in BTR in 2025, depending on the data set.
This investment is reflected in the number of planning applications made for BTR, with the total number of BTR homes in planning increasing to over 101,500 homes in Q4 2025. In 2025, SFH accounted for 25% of total BTR delivery, its highest share on record; meanwhile, both MFH and co-living delivery dropped by 28% and 33%, respectively.
What is driving the growth of single-family housing?
Whilst MFH and co-living are experiencing a contraction in delivery, SFH is seeing a dramatic increase.
The number of authorities with BTR in their pipeline increased to 213 in Q3 2025 and has remained at this level into Q4 2025, as new, more suburban schemes came forward, with SFH continuing to expand into new markets across the UK.
There have been several key drivers for the rise of SFH, including:
- Tenant demand: Rise of remote working, people wanting more space and gardens.
- Investor appeal: SFH offers diversification, aligns with long-term ESG goals and results in earlier rental returns as development can come forward in phases rather than MFH, which requires an entire building to be completed before residents can move in.
- Lower operational costs: A result of lower requirements for internal communal amenity space when compared to MFH, plus reduced maintenance costs and complexities when compared with high-rise development.
- Building Safety Act: Resulting in uncertainty and delays around the Gateway process for high-risk buildings.
- Market Gap: A shortage of high-quality rental homes for families in suburban locations, as set out above.
What makes a successful SFH scheme?
Location location location
Locational priorities include: proximity to transport infrastructure, schools and other amenities. SFH is popular with the younger demographic of the PRS, with nearly 90% of occupiers under 45 years old, compared to 51% across all rental housing. The most common employment type of occupants is professional occupations, with an emphasis on key workers, including nurses, teachers, and social workers (31%).
Affordability
Broadly, the suburban location of SFH makes it more affordable than MFH, which is typically located in city centres. Subsequently, a broader demographic can access SFH.
Bespoke design
Increasingly, there is consideration of ‘bespoke’ requirements during planning and construction phases, with an emerging differential between SFH and open market sale housing. SFH places an increased emphasis on ESG requirements and sustainability interventions (e.g. EV charging, ASHP and PV). Homes within the PRS are also often smaller than their ’for sale’ counterparts and tend to prioritise less land-intensive arrangements, e.g. through reduced reliance on garages and detached properties.
There is also a strong and ongoing investor emphasis on the speedy delivery of approved dwellings and the creation of a ‘complete community’, including supporting open space and other infrastructure early in the development programme, to the benefit of increased delivery rates.
The PRS is growing at an unprecedented rate, with the composition within the sector itself changing rapidly, redefining what tenants and investors can expect from BTR into 2026 and beyond. As demand for space, sustainability, and flexibility in location continues to increase, so will demand for SFH, with SFH increasingly becoming an essential pillar of UK housing delivery.
As Town Planners, we are adapting to the specific and evolving requirements of the SFH BTR sector, and how it differs to ‘for sale’ schemes. Using our extensive experience, we are able to articulate the benefits and differences of SFH to Local Planning Authorities in order to speed up delivery of this growing opportunity and to maximise investment.
