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Living sectors are reshaping UK real estate — why are investors shifting billions into Build to Rent, student housing, and senior living? Richard Valentine-Selsey explores what’s driving this evolution and where the next big opportunities lie.
Evolution in the Living sectors
In 2015, the Living sectors only accounted for 11% of total investment in the UK. Despite a fall in the number of homes under construction, this reached 25% in 2025.
More than that, Savills 2025 European OpRE survey found that investors planned to deploy over £32 billion of capital into the Living sectors over the next three years, with the UK and Ireland a priority location for 50% of respondents.
As interest rates and gilt yields fall, development viability will gradually improve. Meanwhile, the first generation of Build to Rent (BTR) will offer opportunities to buy into stabilised income streams. But how will that play out in different parts of the market?
SINGLE FAMILY
Leading new development
The Single Family Housing (SFH) market has accounted for around half of all investment into BTR since 2023. Early investment was driven by the housebuilding industry pursuing alternative sources of demand for homes they had already committed to build, as Help to Buy was wound up.
But we have seen a shift in mindset from housebuilders, with many proactively setting a target to deliver 10% of their annual completions to institutional investors as markets improve. Importantly, strong recent rental inflation (especially relative to house price growth) has made delivery of this nature more viable.
The attractiveness of SFH has been further bolstered by the fact that it isn’t caught up in the Building Safety Gateway delays. But it also has the advantage of servicing demand from young families looking to put down roots in an area — the strongest growing part of the rental market.
Accordingly, we believe it will lead to a recovery in the BTR development pipeline, both as housebuilders look for more routes to market and investors see competitive returns re-emerge.
MULTIFAMILY
Recycling first-generation schemes
Multifamily was at the forefront of the emergence of BTR in the UK.
But, more recently, it has faced rising construction costs, increased finance costs, stricter building safety regulations, and delays in securing Gateway sign-off construction.
And this, together with greater availability of operational assets, has caused investors to focus more of their activity on existing units — those already delivering a stabilised income stream. These opportunities are set to increase as the pioneer funds come to an end, some current owners look to recycle capital, and others look to consolidate their position by expanding in order to build further critical mass in 2026.
And so, the expectation is that those looking to exit first-generation stock will provide opportunities for other investors looking to enhance current returns through asset management, operational efficiencies, and targeted capex.
Meanwhile, funding structures that have evolved over recent years mean developers are increasingly likely to receive their profit once schemes are stabilised, rather than on practical completion. This should gradually open up more development opportunities, albeit over a longer timeframe than SFH.
At the same time, co-living is set to further evolve, finding its place in markets where it provides a less expensive alternative to more mainstream, but undersupplied, tenures.
STUDENT ACCOMMODATION
Becoming more selective
Respondents to Savills 2025 OpRE Investor Survey from March 2025 placed Purpose Built Student Accommodation (PBSA) at the top of their list of priority sectors.
Over the past decade, appetite has been driven by growth in student numbers, which outpaced new delivery to drive strong rental growth.
But 2025 saw concerns around occupancy levels surface in some markets. Two of the largest providers in the UK reported that reservations were below their level at the same point in previous years in recent trading updates. It is no coincidence that around 150 providers failed to meet international recruitment targets for the 2025/26 academic year. As a result, despite 2025 having the strongest third quarter of investment on record, pricing softened by 25 bps through the first nine months of 2025.
Looking forward, investors will need to ensure thoughtful underwriting of locations. That will include a tighter focus on the financial strength and growth potential of individual institutions. It will also mean that selecting the right operating partner will be crucial.
SENIOR LIVING
Shifting to rental models
2025 was a year of consolidation in the Senior Living sector, with several high-profile mergers and joint ventures.
But, we also saw growing interest in rental models, suggesting the market is shifting toward a more income-focussed approach. This pivot toward rental mirrors trends already seen in the US, where shorter income-producing business plans appeal to a broader range of capital.