In the UK, urban family housing can combine the delivery of high-quality homes to underserved markets with tangible local outcomes, alongside long-term rental growth and attractive total returns.
Read this article to understand:
- How urban family housing can answer a specific set of needs for residents of British cities and towns
- Why the housing gap is most acute for certain urban middle-income families in the rental market
- Our urban family housing strategy’s local, data-driven approach
In the context of an undersupply of housing, three demographic forces are at work concurrently.
First, household sizes are declining, meaning the same population requires more units. Second, affordability constraints are putting home ownership beyond the reach of many. Third, urbanisation is concentrating demand in locations where supply is most constrained. Major cities continue to grow faster than national averages, driven by the persistent pull of employment, high-quality education and established communities.
In this context, middle-income households, typically those who do not qualify for social housing but face affordability constraints, are underserved. Our urban family housing strategy, developed in partnership between local authorities and private investors, is designed to provide an aspirational but affordable solution.
This aligns with social outcome targets like affordability and regeneration. A renewed policy emphasis on housing and urban regeneration could also help unlock sites, infrastructure investment and local authority partnerships that support the delivery of housing in underserved urban locations.
At the same time, these structural shifts support long-term rental growth – and therefore highly predictable income – and attractive total returns.
Defining the opportunity: The missing middle
In British cities, urban cores often consist of older housing stock, with low-density postwar neighbourhoods. In addition, social housebuilding declined in the 1970s, at the same time as private housebuilding, and is yet to recover.1 Simultaneously, private buy-to-let owners are exiting the market en masse, with an estimated 560,000 homes lost from the private rented sector between 2016 and 2025.2
And high mortgage costs are limiting ownership access. In England and Wales, for example, house prices are almost eight times the average household earnings.3
This gap is most acute for the “missing middle”
All this combines to create a gap in good-quality affordable urban rental housing suitable for families. This gap is most acute for the “missing middle” – middle-income households who don’t qualify for social housing but don’t have the means to access home ownership. Many are thus forced into the fragmented, often older and low-quality private rental sector.
For investors, this creates an opportunity to provide good-quality housing to these households, in locations close to urban centres with high demand.
Urban family housing: Strategy overview
To achieve this, our urban family housing strategy targets edge-of-centre or vacant sites in towns and cities with strong employment fundamentals. These regions are frequently marked by underinvestment and a lack of professionally managed, high-quality rental housing.
Our approach to selecting locations is led by both data and opportunities. Our proprietary toolkits help us filter Local Authorities across the UK to identify where the strategy is most relevant and investment most needed. This gives us confidence to focus on large urban economies outside London, such as Manchester, Liverpool and Southampton, with an emphasis on areas subject to wider regeneration programmes.
We also have a robust investment process which filters sites appropriately from the bottom up.
The developments will deliver low-rise, high-density accommodation such as terraces, stacked maisonettes and family units, with energy-efficient, low-carbon designs and neighbourly features (like low fences, shared play-spaces away from cars and tenant-maintained planting – see Figure 1).
Figure 1: Examples of future developments
Source: Place Capital Group, Aviva Investors, June 2026.
Architectural illustration only.
This strategy offers the potential to address local needs and deliver positive, place-based social outcomes through improved housing standards and investment in underserved locations.
Case Study: Vescock Street, Liverpool
Over the past decade, sale prices in Liverpool have seen significant increases across all property types. Meanwhile, the rental market has suffered from low housing supply, causing rents to soar by more than 46 per cent in the past ten years.4
Vescock Street is strategically located, approximately two miles from Liverpool's city centre, offering residents convenient access to the city's amenities, employment hubs, and cultural attractions (see Figure 2).
Figure 2: Vescock Street site location
Source: Cushman & Wakefield, 2026.
The area also retains historic buildings, a canal network, Victorian parks and open spaces. Despite being underinvested in recent years, it is enduringly popular, and residents maintain strong social and cultural ties to it. For new occupants, the draw is well-located yet affordable housing, with excellent – and improving – public and green travel routes in all directions.
Vescock Street is both flanked by and a major contributor to strategic and large-scale regeneration strategies. These include the new Everton FC stadium, Ten Streets regeneration, the Greater Market and the proposed North Liverpool New Town.
These efforts collectively aim to transform North Liverpool into a thriving, sustainable, and culturally rich area, fostering economic growth and improving the quality of life for its residents.
We have partnered with Place Capital Group, a specialist regeneration developer expert in unlocking hard-to-reach sites. The proposal will provide a mix of maisonettes and houses aiming to meet local demand, while benefitting from the area’s infrastructure.
Why this matters for investors
An urban family housing strategy can complement existing real-estate allocations, filling a gap between premium multi-family and subsidised accommodation. It can help solve a clear affordability gap and potentially provide predictable income and attractive total returns.
