Living Sectors Circular

• Driving growth and additionality in single-family housing
• Operational Excellence – Multi-Family Focus
• Investment viewpoint – What’s hot and not in Living Capital markets
• Legislation update: The Renters’ Rights Act 2025

The UK’s housing market continues to face a structural supply-demand imbalance, with household formation outpacing delivery. Despite recent progress, the country remains well short of the estimated 300,000 new homes per year needed to meet demand. Within this context, Single-Family Housing (SFH) is emerging as a resilient and scalable asset class—offering long-term income, inflation hedging, and social impact potential.

For investors, the question is no longer why SFH, but how to scale it—efficiently, sustainably, and with genuine additionality. Increasingly, the answer lies in regional housebuilders, framework agreements, and a more agile, partnership-led approach to delivery.

The Demand Imperative

Recent figures from the Office of National Statistics (1) show that in the calendar year 2024, there were 132,460 housing starts and 184,410 completions across the UK, with less than 25% (45,020) of completions being affordable homes provided by Housing Associations or Local Authorities.

This still falls significantly short of national need when compared with the 300,000 homes per year targeted by the Government. Meanwhile, the private rented sector continues to grow, now accounting for over 20% of housing stock, alongside demand for family-sized rental homes, driven by demographic shifts, affordability constraints, and lifestyle preferences.

SFH is uniquely positioned to assist in meeting this demand, offering the space, tenure security, and community feel that many renters seek, particularly families and key workers.

(1)Indicators of house building, UK: permanent dwellings started and completed by country - Office for National Statistics

Regional Housebuilders: The Untapped Engine of Delivery

While the top 10 UK housebuilders deliver around 60% of new homes, SMEs Housebuilders and regional developers account for less than 10%—a figure that has declined sharply over the past two decades. Yet these smaller players are often best placed to unlock complex sites, deliver with local sensitivity, and move quickly.

For investors, partnering with regional housebuilders offers several advantages:

• Access to underutilised land and smaller sites that may be overlooked by national PLCs.
• Faster planning and build-out due to local knowledge and leaner operations.
• Diversification of delivery risk across multiple geographies and counterparties.
• Enhanced ESG credentials through support for local employment and SME growth.

However, these developers often lack the capital or exit certainty to scale. This is where institutional investors can play a catalytic role.

Framework Agreements: A Scalable Solution

Framework agreements are gaining traction as a way to formalise long-term partnerships between investors and delivery partners. These agreements provide a structured route to:

• Aggregate delivery across multiple sites and regions.
• Standardise design and specification, improving build efficiency and operational performance.
• De-risk development for housebuilders via forward funding or forward purchase models.
• Accelerate pipeline delivery by removing the need for repeated procurement and negotiation.

For investors, frameworks offer capital efficiency, predictable deployment, and portfolio scalability—while enabling a more proactive role in shaping housing outcomes. However, often framework agreements are seen as restricted to the top level housebuilders, and not, as a mechanism that can be used by regional or SME firms to support housing delivery.

Driving Additionality, Not Just Alternative Tenure

A key concern for policymakers and investors alike is ensuring that institutional capital delivers additionality — new homes that wouldn’t otherwise be built. Often framework models repurpose existing pipelines of planned homes that are delivered into a rental model, rather than open market sale. The true opportunity for additionality exists by partnering institutional capital with regional housebuilders and unlocking smaller, often stalled sites. By working with established, mid-sized delivery partners investors can:

• Bring forward new supply that complements, rather than competes with, traditional for-sale models.
• Support planning and infrastructure investment through early engagement and local partnerships.
• Deliver tenure diversity, including affordable and intermediate rent, aligned with local needs.

This approach not only supports housing targets but also builds long-term social licence and resilience into investment strategies.

Conclusion: A New Model for Scaled Impact

The convergence of institutional capital, regional delivery expertise, and the use of structured frameworks outside of the top tier housebuilders represents a powerful opportunity to reshape the UK’s housing landscape. For investors, the SFH sector offers more than just stable returns — it offers a chance to be part of the solution to a generational issue.

By backing regional housebuilders, embracing framework agreements, and focusing on true additionality, investors can unlock value, accelerate delivery, and help close the UK’s housing gap — one family home at a time.

The UK’s Build to Rent (BTR) sector has matured significantly over the past decade, evolving from a niche investment class to a cornerstone of institutional residential strategies. As the sector scales, operational excellence has become the defining factor in delivering consistent returns, tenant satisfaction, and long-term asset value. This article explores what has worked, what hasn’t, and where the opportunities lie, particularly in the context of mid-market and low-amenity BTR models.

What’s Worked: Lessons from the Front Line

1. Professionalised Management

One of the most successful aspects of UK BTR has been the shift from reactive property management to proactive, hospitality-led operations. Operators like Greystar, Get Living, and Quintain Living have demonstrated that consistent service, rapid maintenance response, and community engagement drive higher retention and lower voids.

2. Data-Driven Decision Making

Operators who have invested in robust data platforms, tracking everything from maintenance tickets to NPS scores, have been able to optimise staffing, reduce churn, and improve net operating income (NOI). Real-time insights into resident behaviour and preferences have enabled more agile responses to market shifts.

3. Amenity Rationalisation

While early BTR schemes leaned heavily into high-end amenities (gyms, cinemas, co-working lounges), many operators have since refined their offering. Amenities that are underutilised or expensive to maintain have been scaled back or repurposed, improving operational efficiency without significantly impacting resident satisfaction.

What Hasn’t Worked: Operational Pitfalls

1. Over-Amenitisation

Some early schemes over-invested in amenities that failed to deliver ROI. High-spec communal spaces often became cost centres rather than value drivers, particularly in locations where residents prioritised affordability over luxury. The aftermath of the “Amenity Arms Race” of the previous years can be seen with underutilised niche amenity spaces present in numerous schemes across the sector.

2. One-Size-Fits-All Models

Applying a premium multi-family model across all geographies has proven ineffective. In secondary cities or suburban locations, residents often seek value, space, and simplicity over concierge services and rooftop terraces. Even within prime urban locations, the depth of market for the cohort of renters having both affordability and desire to pay rental premiums is not unlimited. In depth market, viability and whole life-cycle costing assessments have become crucial factors in planning and funding processes.

3. Fragmented Tech Stacks

Many operators have struggled with legacy systems and siloed data. Without integrated platforms, it becomes difficult to scale operations efficiently or deliver a seamless resident experience. Furthermore, as schemes mature, data availability grows for both resident and asset behaviours. Utilising this hard-earned pool of data becomes more time-consuming, marginal and ineffectual when spread over multiple operating systems.

The Rise of “BTR Lite”: A Leaner Model

A growing trend in the UK is the emergence of “BTR Lite” — schemes that strip back high-cost amenities in favour of operational simplicity and affordability. These developments typically offer:

• Efficient layouts with minimal communal space
• Self-service technology for leasing and maintenance
• Lean staffing models supported by automation
• Lower service charges, appealing to cost-conscious renters

This model is particularly well-suited to regional cities and commuter towns, where rental affordability is a key driver. Operators like Wise Living, Placefirst & Marathon have shown that well-managed, low-amenity schemes can achieve strong occupancy and stable returns.

Market Depth: Mid-Market vs. Premium

While premium multi-family housing continues to perform well in core urban centres like London and Manchester, the real depth of the UK rental market lies in the mid-market. This segment—comprising young professionals, key workers, and families—represents a vast, underserved demographic.

Key characteristics of successful mid-market BTR schemes include:

• Efficient design that maximises rentable space
• Durable, cost-effective finishes that reduce lifecycle costs
• Location-driven value, with proximity to transport and employment hubs
• Operational simplicity, enabling sustainable rents and higher margins

Opportunities for Future Operational Excellence

To drive the next wave of performance in BTR, operators should focus on:

1. Platform Integration: Streamlining tech stacks to unify leasing, CRM, maintenance, and analytics.
2. Resident Lifecycle Management: Using data to personalise the resident journey — from enquiry to renewal.
3. Sustainability as a Service: Embedding ESG into operations, not just design, through energy monitoring, waste reduction, and community engagement.
4. Flexible Staffing Models: Leveraging remote support, mobile maintenance teams, and AI-driven service tools to reduce overheads.
5. Product Diversification: Offering a range of unit types and service levels within a single scheme to capture broader demand.

Conclusion

Operational excellence in multi-family and BTR is no longer about who wins the “Amenity Arms Race” — it’s about who can deliver consistent, scalable, and resident-centric service. As the sector matures, the winners will be those who can balance efficiency with experience, and affordability with aspiration. The rise of BTR Lite and the growing appetite for mid-market rental homes signal a shift toward leaner, smarter operations — where simplicity is not a compromise, but a competitive advantage.

The UK Living Capital Markets are undergoing a dynamic transformation in 2025, shaped by shifting investor priorities, evolving demographic needs, and a recalibration of risk and return expectations. From Build-to-Rent (BTR) to Purpose-Built Student Accommodation (PBSA), and from co-living to later living, the sector continues to attract capital—but not all opportunities are created equal.

What’s Hot: Key Focus Areas for Investors

1. Operational Assets Over Development Risk

Investors are increasingly favouring stabilised, income-producing assets over forward funding or speculative development. In 2024, forward purchases and investments in standing stock rose by 31%, while forward funding deals dropped to their lowest level since 2018.

2. Build-to-Rent (BTR) and Single-Family Rental (SFR)

BTR and SFR remain top picks, driven by structural undersupply and resilient rental demand. Despite a cooling in rental growth, yields remain attractive, and institutional appetite is strong. Major schemes in Leeds, Glasgow, and Stratford signal continued confidence in the sector. UK rents rose 6.7% in the last year, and showed resilience in suburban areas, favoured for Single Family Housing.

3. Student Housing

PBSA continues to perform well, underpinned by strong demand from both domestic and international students. Investors are drawn to its operational resilience and predictable income streams.

4. Later Living and Healthcare

With an ageing population and growing demand for care solutions, retirement living and healthcare assets are gaining traction. These sectors offer long-term demographic tailwinds and are increasingly seen as core components of diversified Living portfolios.

What’s Not: Cooling Trends and Investor Caution

1. Development Pipeline Pressures

Viability challenges, planning delays, Building Safety requirements and construction cost inflation have led to a slowdown in new project starts. While major schemes are still progressing, smaller developments are struggling to get off the ground.

2. Affordability Constraints

Rental affordability is being stretched in several urban centres, which could limit future rental growth and impact tenant retention. Investors are becoming more selective, focusing on locations with sustainable demand and income resilience.

3. Fragmented Ownership in Emerging Sub-Sectors

While co-living and affordable housing are gaining interest, institutional-grade stock remains limited. Fragmented ownership and operational complexity are barriers to scale for many investors.

What Investors Want in 2025

• Stability and Scale: Preference for large, well-located, operational assets with proven income.
• Operational Expertise: Investors are increasingly comfortable with direct-let and operational exposure, especially in BTR and PBSA. Professional management and operational expertise are at a premium, as focus on efficiency of operational assets increases.
• ESG Integration: Sustainability credentials and social impact are becoming key differentiators, with renters reporting that they form a key part of their decision- making process.
• Diversification: Appetite is growing for mixed-tenure schemes and portfolios that blend student, co-living, and later living.

How Agency Teams Can Help

Agency teams are playing a pivotal role in unlocking value and guiding capital:

• End-to-End Advisory: From land acquisition to funding, planning, and exit strategies, integrated teams like those at Carter Jonas provide cradle-to-grave support.
• Capital Matching: Agencies connect global capital with local opportunities, leveraging deep market insight and investor networks.
• Bespoke Structuring: Whether it’s forward funding, JV structuring, or portfolio sales, agencies tailor solutions to investor risk profiles and return targets.
• Market Intelligence: Real-time data and research help investors make informed decisions and anticipate market shifts.

Conclusion

The Living Capital Markets in 2025 are defined by a flight to quality, operational resilience, and a growing appetite for diversified, ESG-aligned assets. While development risk and affordability concerns temper some enthusiasm, the long-term fundamentals remain compelling. For investors, the key to success lies in strategic alignment, local expertise, and the right agency partners to navigate complexity and unlock opportunity.

As the UK Parliament edges closer to enacting the Renters’ Rights Act 2025, the private rented sector (PRS) is on the cusp of its most significant transformation in decades. While the Act is framed around tenant protection and housing quality, its implications for investors, landlords, and operators are far-reaching. This article explores not just what the Act says, but what it means in practice—and how stakeholders must adapt to remain competitive and compliant. Further information is also available on our dedicated webpage here.

Key Provisions of the Act

The Renters’ Rights Act introduces a suite of reforms aimed at rebalancing the relationship between landlords and tenants. Core measures include:

• Abolition of Section 21 ‘No-Fault’ Evictions: Landlords will no longer be able to evict tenants without a valid reason.
• All Tenancies to Become Periodic: Fixed-term tenancies will be replaced by rolling agreements, allowing tenants to leave with two months’ notice.
• Rent Increases Limited to Once Per Year: With a right to challenge excessive increases via tribunal.
• Ban on Large Upfront Rent Payments: Monthly rent payments will become the norm, with exceptions for pre-existing agreements.
• Right to Request Pets: Landlords must consider requests and can charge a capped pet deposit.
• New Landlord Ombudsman and Property Portal: A mandatory redress scheme and centralised database to improve transparency and accountability.

What This Means in Practice

1. A Shift Toward Professionalisation

The Act signals a clear move toward a more regulated and transparent rental market. For institutional investors and professional landlords, this is an opportunity to differentiate through quality, compliance, and service. Operators with robust systems for documentation, tenant engagement, and dispute resolution will be better positioned to thrive.

2. Operational Adjustments

• Void Risk Management: With tenants able to leave at short notice and landlords facing stricter possession rules, managing void periods becomes more complex. Expect increased demand for agile property management and tenant retention strategies.
• Rent Setting Discipline: Annual rent increases must be justified and in line with market rates. Operators will need to adopt more data-driven pricing models and maintain high property standards to justify rents. Comparable property data within the local market will form a key part of providing robust evidence for any rent uplift.
• Compliance Infrastructure: The introduction of a landlord ombudsman and property portal means that record-keeping, maintenance logs, and communication trails must be watertight.

3. Financial Implications

• Valuation and Lending: The end of fixed-term tenancies introduces uncertainty around income streams, potentially affecting asset valuations and lending terms. Lenders may apply higher risk premiums or require more conservative underwriting.
• CapEx and OpEx Pressures: Higher tenant expectations and regulatory scrutiny will likely increase both capital and operational expenditure. However, well-maintained, future-proofed assets will command stronger demand and resilience.
• Rent uplift modelling: Current modelling is completed assuming an annual rental uplift, but future modelling should consider the potential for delayed benefit from increases through use of the tribunal process. A key point is that if a rental uplift is challenged, even if it is upheld by a tribunal, the uplift is not retrospectively applied – it only takes effect from the date of ruling. Hence, if 25% of rents in a portfolio or scheme were to be challenged, and the average time for decision is 3 months, that would represent a shift to an average of 12.9 months between uplifts across the whole portfolio. If that pattern were to be replicated across a portfolio of several hundred units for multiple years, the rental loss is in the hundred of thousands of pounds, which will impact both Net Operating Income, and investor IRR.

Strategic Considerations for Investors

Portfolio Rebalancing

Investors may need to reassess asset strategies, particularly in markets with high tenant turnover or where rent growth has historically relied on short-term lets and frequent re-letting. Local sector knowledge and geographical analysis will be key to determining the correct investment or divestment strategy.

Build-to-Rent (BTR) Advantage

The BTR sector, with its emphasis on long-term tenancies, professional management, and tenant experience, is well-aligned with the Act's direction. We expect to see increased institutional interest in BTR and Single Family Housing in particular as a resilient and scalable model.

Technology and Data

Digital platforms for rent collection, maintenance tracking, and tenant communication will become essential tools—not just for efficiency, but for compliance and dispute resolution.

Conclusion: From Compliance to Competitive Advantage

While the Renters’ Rights Act introduces new constraints, it also offers a roadmap to a more stable and investable rental market. For investors and operators willing to adapt, the reforms can be a catalyst for long-term value creation. The winners will be those who embrace professionalism, invest in tenant experience, and build operational resilience. Local knowledge, strong operating procedures and access to granular data to support operating and investment decisions will be key.