Investment in single family residences in the U.S. and UK

The executive order does not itself impose immediate restrictions on institutional ownership of single‑family housing, and instead directs key agencies to issue guidance and tasks the White House with preparing legislative recommendations for Congress. As a result, significant uncertainty still remains.

It is hotly debated by economists and housing experts whether institutional investors acquiring SFRs have contributed to the problem and whether this ban could be part of a solution.  While the proposal has strong appeal, most economists do not believe that this investment by institutional investors in SFRs helped to create the affordability crisis in housing, and many have expressed concerns that such a ban would further exacerbate the issue.    

Institutional investment in SFRs first began in a significant way during the 2007-2009 financial crisis.  Government Accounting Office ("GAO") studies performed at that time found that institutional investors actually contributed to stabilizing home values in neighbourhoods that otherwise would have been in economic freefall. There is strong sentiment that many houses that are in occupancy today would have ended up vacant and boarded up but for the institutional investment in such neighbourhoods and that the proposed ban would remove the stabilizing factor that this investment could bring during the next market downturn. 

Interestingly, this issue appears to reveal some daylight between the position of President Trump and the members of the Republican Conference, whose majority he is trying to preserve.  When Democrats have introduced similar legislation in prior years, it has failed to draw any Republican sponsors.  And, at the time, officials at the non-political Pew Charitable Trust Housing Policy Initiative expressed doubts that the proposed legislation would bring housing prices down in any significant way. 

Earlier this month, Bloomberg reported on comments from former House Financial Services Committee Chair Patrick McHenry indicating that issues with housing affordability have much more to do with state and local land use issues and regulatory barriers to new construction, noting the very tiny fraction of SFRs owned by institutional investors. Green Street estimates that institutions only own approximately 5% of the SFR market, representing roughly 1% of the overall single family housing stock.[1]

Even with President Trump's strong hold over the wing of his party most loyal to him, political insiders have expressed doubts about his ability to sell this idea to Congressional Republicans.  According to a senior Republican staffer who requested anonymity in order to speak freely, “It makes no sense for President Trump to promote this idea at this time,” noting it is not aligned with the broader strategic objective of the Republican majority.

President Trump addressed this issue again at the World Economic Forum in Davos, Switzerland. We will supplement this client alert as further details become available regarding the scope and implementation of the executive order.

UK position

The political and regulatory position in the United Kingdom has moved in the opposite direction to the U.S. Rather than proposing to exclude institutional investors from the SFR market, UK policy is increasingly reliant on institutional capital to address structural housing undersupply. Helpfully, institutional investors active in the UK also appear keen to deploy the necessary capital to solve the issues at hand.

SFR has moved to the centre stage within UK institutional residential strategies with investors, developers and asset managers characterising the sector as a core delivery mechanism for new housing supply. Players in the UK market have highlighted strong demand, low vacancy and the scalability of institutionally delivered SFR as reasons the asset class is now viewed as attractive.

Importantly, the UK government's response to housing related affordability pressures has focused on the regulation of standards rather than restricting who can own housing. Legislative reforms such as the Renters' Rights Act 2025 are expected to increase operational and compliance requirements for landlords, but industry consensus is that these reforms are intended to favour professionally managed, well-capitalised operators rather than to deter institutional involvement. The scale required to absorb additional regulatory and administrative costs is likely to reinforce the role of large operators in the SFR sector. In the UK, regulation is being used as a filter to encourage the long-term ownership and professional management of SFR assets, rather than act as a blunt barrier to access.

This divergence in political messaging also reflects a deeper difference in how affordability is framed. While the US proposal reflects a more demand side narrative, in which institutional buyers are portrayed as competing with owner-occupiers for existing housing stock, the UK government (and market participants) largely treat affordability as a supply side problem, driven by planning constraints, delivery risk and development viability. Institutional SFR is therefore presented by government and participants alike as a mechanism to accelerate delivery in the UK.

Altogether, the difference in approach on either side of the Atlantic here emphasizes the importance of jurisdiction specific analysis for residential strategies that may otherwise appear comparable at an asset class level. Whichever jurisdiction you are operating out of our global team would be delighted to advise you on your real estate investment strategy.

Authored by Michael Kosmas, Ana Tenzer, Dan Norris, Sanjay Dave, Stella Bliss, and Ingrid Stables.