It is fair to say that despite well-versed development challenges in recent years, there has been no shortage of investment in Build to Rent.
In January 2026, a Savills report revealed that UK investment in the sector had reached a record £5.3 billion in 2025 – an annual increase of 6%.
But it’s not just a case of rising volumes.
Shifting demographics, evolving consumer behaviours and, of course, ever-increasing affordability issues mean the type of Build to Rent housing being planned and constructed is changing, too.
Moving markets
Traditionally, the Build to Rent (BTR) story has been predominantly written with multi-family homes.
High-density developments – typically urban apartment blocks – were designed with on-site gym facilities or common rooms to appeal to short-term renters who skewed younger and were more likely to work or study in city centres.
In recent years, however, we’ve seen an almost meteoric rise in single-family homes; standalone structures, essentially like houses, that are often located in more suburban locations and aimed at families eager for more stability and longer-term arrangements.
In fact, single-family homes (SFHs) now represents 59% of total BTR investment – up from 47% in 2023 as investors and developers recognise new opportunities.
But some of the same driving forces behind the move to SFHs now look set to push the market towards a new direction.
Seizing the moment
The cost of living crisis combined with the scarcity of affordable housing in the UK means it’s now more difficult to get on the property ladder than in previous decades.
Research by Nationwide puts the first-time buyer house price to earnings ratio at 4.7 – a figure that’s been creeping slightly lower over the last few years but still presents renters with a steep challenge, given average rents outside London have risen a remarkable 40.9% from Q4 of 2020 to Q4 of 2025.
The affordability and flexibility offered by co-living properties – where multiple occupiers share communal kitchen and living room facilities – makes them especially attractive to young people looking to live in central locations.
A shortage of purpose-built student accommodation coupled with high graduate retention rates in many UK cities is also prompting increased interest in co-living.
And while co-living schemes remain a smaller part of the BTR mix, they are growing, with a remarkable 1,508% year-on-year rise in completions outside of London during 2024.
A different kind of home
So what are the key differences to keep in mind when it comes to developing co-living homes instead of other types of BTR properties?
Most obviously, unit design and space use prioritise creating efficient private rooms and high-quality shared areas, requiring architects to consider how residents interact in communal places.
The fact that co-living generally appeals most to mobile young professionals, graduates and international student renters also means you can expect higher turnover, shorter tenancies and an expectation for prime city-centre locations.
While most BTR homes feature gyms, lounges and outdoor spaces, co-living adds further requirements for cleaning, events, utilities and concierge-style management, with an operational model that calls for greater intensity but, positively, the chance to boost engagement among tenants.
Rich rewards
Many developers and investors are already changing their BTR strategy, sharing our view that co-living is here to stay.
They are rethinking their site selection and density assumptions, designing homes that provide greater flexibility and adaptability over time, and integrating operations and management earlier in the design process.
The financial rewards can be lucrative.
Dedicated BTR co-living developments represent a strong value proposition thanks to their simplicity, cost efficiencies and ability to generate higher rental incomes.
Accommodating multiple tenants under one roof while benefiting from the capital appreciation potential of properties in high-demand urban areas is especially enticing.
But of course, the opportunities are not entirely without their challenges.
The need for knowhow
Higher usage levels make it even more important to not only achieve compliance, but also build to a particularly strong standard of quality and durability.
This calls for greater co-ordination between designers, contractors and operators, as well as for clear standard-setting and guidance at early project stages.
There’s also the need to respect new regulations such as the Renters’ Rights Act 2025 and to be prepared for greater competition in key markets as other co-living developments spring up beyond London, where the majority are currently found.
As experts in the Build to Rent arena, NHBC’s team is here to help you expand your Build to Rent offer or add it to your portfolio.
Acting now could allow you to capitalise on the changing marketplace before your competitors steal a march – and our experience in managing development risks from the earliest stages of land acquisition right through to competition gives you the chance to move with confidence.
Work alongside NHBC with a focus on building it right first time, reducing lifetime cost and protecting yield for landlords.
