Record year for single family underpins BTR investment in 2024

At £2bn, Q4 was the most active quarter for BTR since 2021 and marked a stark uptick on Q3, which saw just £589m of assets transact.

Single family investment continued to motor ahead with a further £709m of assets changing hands in the final quarter, taking the full-year total to £2.4bn – above the previous record of £2.2bn in 2023.

In a sign of continued appetite for rental housing, investors acquired about 7,000 new single family homes in 2024. Among the most active were Lloyds Living (formerly Citra Living), alongside newcomers such as Kennedy Wilson and CPPIB, which recently formed a JV targeting £1bn of assets in the sector.

Q4 also saw the sale of another operational single family portfolio, with Lloyds Living acquiring 821 homes across nine sites from Gatehouse and Sigma Capital. In total, £325m of operational single family stock traded in 2024, up from £275m last year.

Though not included in Q4’s totals, JLL advised the Ministry of Defence on its landmark £6bn reacquisition of 36,347 military homes sold to Annington in 1996. The Service Family Accommodation deal exchanged on 16 December, completing in early January.

However, in a reversal from the first half of the year, multifamily was the more active sector at the end of 2024.

Investors poured £1.2bn into UK multifamily in Q4, marking the highest quarterly total for the sector since 2022. The largest transaction came from Starlight Investments, the Canadian investment manager, which acquired two developments totalling 1,049 homes in Manchester from Renaker – in a deal advised by JLL – and a 492-home asset in Basildon from Sovereign Centros for a total of £500m.

Alongside investment in future developments, multifamily continued to attract interest in stabilised stock – a trend that has been growing this year as UK BTR matures and early investors reach the end of their hold periods. LRC was particularly acquisitive in Q4, securing five assets from Platform_ and Invesco for £120m in what was one of the sector’s first stabilised portfolio deals, comprising some of the UK’s earliest institutional stock.

Due to the late surge, multifamily ended the year at £2.6bn, overtaking single family in the final weeks.

At £5.4bn in 2024, BTR activity was up 9% on 2023 but in line with the five-year average. Investment continues to be subdued compared to previous peaks, down 11% on the £6.1bn achieved in 2021.

While the rise of single family and operational multifamily stock have helped bolster investment, continued challenges to multifamily development – particularly viability across much of the UK – have meant that forward funding has dwindled as an entry point to the sector.

Just over a fifth of multifamily investment in 2024 came from forward funding, the lowest on record, with investors opting for joint venture developments and forward purchases where possible to lower development risk.

As a result, despite an uptick in operational stock trading, multifamily investment in 2024 was the lowest it has been since 2017.

Simon Scott, lead director of living capital markets at JLL, said: “The numbers speak to what we are encountering on the ground. There is certainly a distinct increase in activity, and we are anticipating even more trades in the stabilised market through 2025, although it remains to be seen how the volatility in the funding markets may affect that positive sentiment.”

Karl Tomusk, associate director for UK Living research at JLL, said: “The surge we saw at the end of 2024 was a welcome rebound from what had up until then been a subdued year for the sector. But despite invest volumes recovering, what we haven’t seen is a return to ‘normal’. Single family was the driving force for BTR even more so last year than in 2023. Operational multifamily stock will be playing a much bigger role in the sector from here on out, and forward funds continue to be challenging.

“Focus in the sector has shifted, but what hasn’t changed is the need for more housing and the appetite to deliver it where possible. Meeting the government’s housing ambitions will require homes of all kinds, and BTR – whether single or multifamily – will be essential in delivering that.”