Proposed restrictions on private equity firms buying single-family homes in the United States have sparked concerns that large institutional investors could shift their focus towards the UK housing market. Critics fear this could worsen Britain’s housing pressures by driving up rents and encouraging cost-cutting in new developments.
Donald Trump announced plans last week to prevent institutional buyers from purchasing single-family homes in the US, saying the move is intended to ease the strain on families struggling to buy or rent. According to the US Census Bureau, the median home sale price reached $410,800 (£305,000) last year, highlighting the scale of affordability challenges.
Market analysts suggest that this policy shift could lead major US investors to redirect capital towards Britain. Firms already active in the UK, including global investment giants, may expand their involvement in new-build housing projects as opportunities in the US narrow.
While institutional landlords argue they can provide professionally managed, high-quality homes, housing campaigners warn that profit-driven strategies often clash with tenants’ interests. Higher rents and reduced maintenance standards are among the key concerns raised by critics.
Ruth Gilbert, spokesperson for Living Rent, Scotland’s tenants’ union, said large-scale investors and private equity firms should not play a growing role in the UK housing system. She warned that relying on corporate landlords rather than publicly owned housing risks deepening the housing crisis.
Gilbert argued that investor-led housing models often prioritise shareholder returns over tenant wellbeing, leading to rising rents and displacement. She called on both Westminster and devolved governments to commit to a large-scale public housing programme.
Similar concerns were echoed by Jae Vail of the London Renters Union, who said overseas investors chasing short-term gains were contributing to housing unaffordability. She highlighted the contrast between rising rents and the growing number of people living in insecure or temporary accommodation.
Vail stressed the need for long-term solutions, including greater investment in council housing and stronger rent controls, to stabilise housing costs and protect tenants across the UK.
In the US, institutional investment in housing accelerated after the 2008 financial crisis, when firms such as Blackstone acquired large numbers of foreclosed homes. These companies became major landlords, often competing directly with first-time buyers and pushing up prices, according to campaigners.
Experts argue that the underlying issue on both sides of the Atlantic remains a lack of supply. Building more homes, they say, is essential to improving affordability, regardless of who owns them.
In the UK, institutional investors typically focus on new developments rather than existing homes. Marcus Dixon, head of living and residential research at property firm JLL, said large investors are more likely to buy entire rental portfolios than individual homes from owner-occupiers.
Dixon added that government policies have increasingly discouraged small buy-to-let landlords while favouring larger institutional players. As a result, a similar ban to the US proposal appears unlikely in the UK. However, restrictions in the US could still push more investment towards Britain.
Several major US firms already have a significant UK presence, including Blackstone, Kennedy Wilson, KKR and Nuveen. Blackstone alone manages over $1tn in assets globally, with its real estate division overseeing £240bn worth of property.
Blackstone has defended its role in the UK housing market, stating that increasing supply is the only sustainable way to improve affordability. The firm says its investments have helped deliver more than 20,000 new affordable homes since 2017 through its portfolio company, Sage Homes.
Other investors have been more cautious in their public response. KKR, Kennedy Wilson and Nuveen declined to comment on whether they plan to expand their UK housing investments following the proposed US ban.
Blackstone’s UK holdings extend beyond housing and include major leisure attractions such as Madame Tussauds, Legoland Windsor and the London Dungeon. In residential property, it has backed firms such as Leaf Living and Sage Homes.
In late 2023, Blackstone-backed companies partnered with Vistry Group in an £819m deal to acquire nearly 2,900 new homes. Reports have since suggested Blackstone has explored a potential sale of Leaf Living.
Despite Sage Homes promoting positive tenant feedback, the company has faced criticism. Last year, it apologised for service failures after a housing ombudsman investigation found it had not adequately addressed complaints from several residents, including a disabled tenant.
Internationally, Blackstone has adjusted its housing strategy in response to regulation. In Spain, where it became the country’s largest private landlord by 2019, the firm began selling residential assets last year, citing tighter rental rules and legal uncertainty.
Other investors have continued to expand in the UK. In 2024, Kennedy Wilson teamed up with Canada’s CPP Investments in a £213m venture expected to deliver around 900 rental homes across multiple development sites.
Institutional ownership of single-family homes remains relatively small. In the US, such investors own around 0.5% of homes, with purchases falling sharply since 2022. In the UK, investors account for just 0.2% of privately rented homes, rising to 0.4% when including homes under construction.
According to Knight Frank, however, the UK’s single-family housing sector is becoming increasingly attractive to institutional investors. In a report published last April, the firm described the market as a compelling opportunity, particularly as demand for rental housing continues to grow.
As policymakers weigh affordability concerns against the need for investment, the debate over institutional involvement in housing looks set to intensify. With US restrictions potentially reshaping global investment flows, the UK housing market may soon face renewed scrutiny.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property