The US is moving to ban large institutional investors from buying single-family homes in response to fears that corporate ownership is pricing out domestic buyers. The move comes following public pressure on the government in the US that institutions are squeezing out first time buyers, and making home ownership unaffordable. Meanwhile, the property market here in the UK appears to be taking a different approach as it faces a huge shake up following the passing of the Renters’ Rights Act 2025, bringing greater regulation to the sector and pushing huge numbers of individual private landlords to exit the market.
Currently, UK institutional investment is concentrated in build-to-rent (BTR) schemes that create new housing rather than competing for existing stock. This is mainly seen as a positive means of delivering much needed housing and has kept the UK largely free from the issues that come with institutional investment seen in the US.
But could new regulation soon be changing the game when the main provisions of the Renters’ Rights Act 2025 come into force later this year? The threat of increased landlord compliance costs and restrictions has already prompted thousands of private individual landlords who hold a small number of properties to sell up their investments, which analysts expect to create a growing pool of single-family homes up for grabs.
For global investors, especially US funds that might be displaced by Trump’s new proposed restrictions, this might be an opportunity. If large investment funds start buying up existing UK housing stock, this could shift the dynamic. What begins as a solution to rental undersupply could, over time, replicate the very problem the US is trying to solve: domestic buyers squeezed out by deep-pocketed corporate institutions. In a country already grappling with serious housing shortages, that risk is real.
Institutional investors may not be looking at investments in residential homes in the UK property market just yet, but if market conditions change significantly in the wake of the Renters’ Rights Act 2025, which is strongly suspected, we may see large international corporates beginning to influence the private rented sector here in the UK in the future.
The UK’s approach appears focused on increasing housing supply and professionalising rental management which offers a chance to meet growing demand while supporting housing delivery. For investors, this may just be a moment to capitalise on the upcoming changes to help shape a more resilient, regulated rental sector.