Demand will be driven by the recent slowdown in stock availability in the private rented sector (PRS), worsening housing affordability, end of the help to buy scheme, and renting for longer becoming more culturally acceptable.

The report, sponsored by 17 companies active in the industry, involved interviews and surveys with local authorities, housebuilders, developers, industry bodies and government agencies, in order to better understand the future potential of the single family housing market, which is defined as newly built homes, on low rise housing developments that have good connectivity to schools and transport infrastructure.

The single family housing market has already attracted over £3.5bn of investment to date, despite being a relatively nascent sector, and Savills anticipates that this figure is will increase, however the report notes challenges around understanding of the market from key decision makers.

Dr Jacqui Daly, director of residential investment research & consultancy, Savills, comments: “With almost half of build to rent occupiers aged between 26-35, the market is popular with young, middle-income couples and families, with people moving further afield to access these homes. According to our research, these developments tend to have good occupancy with most residents renewing their lease year on year. This is likely to be attributable to the strong levels of satisfaction for those living in these schemes

“But, following a series of stakeholder workshops, we found that ‘single family housing’ is a term that is misunderstood by many local authorities. We believe that by simplifying the terminology and jargon used in the sector, planning committees will fully appreciate that this is a proposition that will help drive delivery. Build to rent is the preferred term because it is defined in national planning policy guidance.

Large housebuilders currently provide the vast majority of build to rent homes, but delivery is currently just 0.5% of new housing completions. Savills research found that housebuilders are keen to establish partnerships with investors on sites where they can deliver at the pace of build rather than sale. At the same time, local authorities are recognising that the sector is adding decent quality homes to the private rented sector and that supply is needed to meet government housing targets. Consequently, the number of local authorities with single family build to rent homes within their development pipelines has grown to over 30%, more than doubling in the past five years.

David Reid, managing director of Legal & General Suburban Build to Rent, says: “Now more than ever, we must deliver diverse residential offerings to better accommodate the broad range of different households that exist in the market. This includes the provision of reliable long-term rental options. Committed and collaborative action from Government, businesses, and investors can dial up the supply of homes to meaningfully address the UK’s housing needs now and for the long-term.”

Jamie Younger, fund manager at Thriving Investments, comments: “Housebuilders have many hurdles to the delivery of homes generally and this includes the delivery of build to rent homes. From competition for land, cost inflation, finance cost, planning and rising affordable quotas. However there is increasing appetite from housebuilders to partner with investors to provide certainty around cashflow, decrease sales timelines and to help create a product that adds social value by creating communities that people want to live in.”

Jonathon Ivory, chief investment officer at Packaged Living, says: “This report makes clear that which the industry has been saying for many years. The UK is not building enough homes to meet demand. This supply / demand imbalance means average house prices to average earnings are now 9x and it takes those same average earners over 10 years to save for the purchase deposit required by lenders… assuming would be purchasers can even service that debt at today’s elevated rates. If residents cannot buy, they must rent. It is therefore incumbent on the build to rent housing sector to step up and play a societal role in delivering the 1m additional rental homes that the report states are required by 2031 to meet this demand.”