Savills noted that the UK single-family sector will make a “growing contribution” to total housing delivery in the coming years. However, so far, the impact on national housing delivery has been “modest” and the UK is still not building enough homes for private rent.

A total of 1,400 single-family homes were completed last year and the single-family market has delivered 8,000 homes in the past five years, compared with Savills’ estimated requirement for 127,000 suburban rental homes. There are now 14,000 operational single-family homes and a further 13,000 under construction.

With lower levels of investment now coming from UK buy-to-let investors, particularly those reliant on mortgage debt, single-family housing “needs to play an increasingly important role” in meeting the need for rented homes, Savills explained.

House builders are restructuring their business models and establishing partnership arms to work with institutional investors to deliver rental homes, showing a “long-term commitment” to the model, the firm added.

Since the UK government aims to increase housebuilding to 300,000 homes a year, and the private rented sector makes up one fifth of UK households, this equates to an annual requirement for 60,000 private rented homes, with 32,400 needed in suburban markets.

While the North West leads in single-family housing delivery, new market entrants and geographic expansion mean single-family housing has now been brought forward in nearly 40% of local authorities in England and Wales.

Due to rising rental values, more opportunities will come forward in markets with higher average sales values, where investors previously struggled to break even. For example, Present Made is currently delivering its 373-home Eddington scheme on the edge of Cambridge, which is set to become the largest suburban rental scheme in the UK.

Piers de Winton, head of single-family investment at Savills, said: “With substantial investment from both domestic and international investors, improved viability and strong rental growth, there is a significant opportunity for single-family housing to meet the growing demand for rental homes and contribute meaningfully to the government’s ambitious housing targets.”