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UK: The UK’s single family rental (SFR) sector has seen operational stock surpasses 26,000 homes as portfolio transactions become an increasingly important feature of the market, according to Knight Frank’s latest Single Family Housing Report 2026.
There are now 26,407 operational SFR homes across the UK, with stock having more than tripled since 2020. A further 12,378 homes are currently under construction.
However, says the report, despite a growing development pipeline, delivery remains modest relative to underlying demand, which is creating significant opportunities for further institutional investment and portfolio growth.
In 2025, 31 per cent of capital invested into SFR was spent on operational portfolios, up from less than 10 per cent the previous year, reflecting growing investor interest for stabilised, income-producing assets as the market matures.
Lizzie Breckner, head of build to rent research at Knight Frank, said: “The SFH sector has evolved rapidly over the past five years. What was once viewed as an emerging part of the living sectors market is now establishing itself as a core institutional asset class. Yet, while we’ve seen significant growth in investment and delivery, supply still isn’t keeping pace with demand.”
“Structural shifts in tenure patterns mean households are renting for longer, creating a deeper pool of renters, particularly in the 35+ age cohort, who are seeking space and stability. With rental housing still in short supply, this continues to create opportunities for investors.”
The persistent shortage of rental housing continues to support rental growth across the UK, particularly for houses. Over the past five years, house rents have increased by 32 per cent, compared with 21 per cent for apartments.
Since 2020, more than £7 billion has been invested into UK SFR, with investment accelerating sharply over the past 18 months. In 2025, SFR accounted for 55 per cent of all Build to Rent (BTR) investment, overtaking multifamily housing for the first time.
In the report, Knight Frank notes that the relationship between institutional investors and housebuilders continues to be important. The firm’s survey of 40 SME and volume housebuilders found that 60 per cent view sales to institutional SFR investors as a necessity in current market conditions, while 33 per cent say such transactions now form part of their long-term strategy.
Jack Hutchinson, partner in residential investment at Knight Frank, said: “Housebuilders are increasingly recognising the role institutional capital can play in supporting delivery. These partnerships not only help developers maintain delivery targets but also provide investors with a scalable route into the market.”
“That dynamic is attracting a greater range of capital, from established UK and North American markets to new entrants from Europe and APAC. Investors are increasingly drawn to the sector’s strong fundamentals, growth potential and ability to build scale. As confidence in the sector continues to grow, we’re seeing investors take a longer-term view of the opportunity and commit to increasingly ambitious expansion plans,” he added.
Since 2020, 35 per cent of investment into the sector has come from overseas capital, with investors from North America, Europe and Asia Pacific joining UK institutions, insurers and pension funds in targeting the asset class.
However, investor ambitions continue to outpace the sector’s current scale. Across eight of the major market participants active today, ownership ambitions now exceed 55,000 homes, compared with around 13,000 currently owned, highlighting growing confidence in the long-term opportunity presented by the sector.
Highlights:
- The UK’s single family rental (SFR) sector has seen operational stock surpasses 26,000 homes as portfolio transactions become an increasingly important feature of the market
- Knight Frank’s latest Single Family Housing Report 2026 says that there are 26,407 operational SFR homes across the UK, with further 12,378 under constriction
- Since 2020, more than £7 billion has been invested into UK SFR, with investment accelerating sharply over the past 18 months
- A further 12,378 homes are currently under construction
