Eight months after they announced a tie-up, £47B real assets business Aviva Investors and UK housing specialist Packaged Living have picked their first UK single-family rental project, buying 195 homes in the West Midlands new town of Telford.

Telford — a new town named after the engineer Thomas Telford and largely created in the 1970s to meet overflow housing demand from the Birmingham conurbation — is not one of the larger, more celebrated towns of the UK. But it does reflect Middle England’s still untapped desire for no-nonsense, affordable rented family homes.

It is the first investment made since the two firms announced a partnership in November 2021, and one of the first large-scale institutional moves into a still novel sector.

Investors are now eyeing up opportunities in SFR as the scope for growth in city centre apartment BTR narrows but investor appetite for rental does not.

In particular, Aviva Investors is in the midst of a rethink of its real estate business, which means a boost to single-family rental and other alternative assets.

The Aviva partnership will create a £700M single-family rental platform of suburban properties across the UK, increasing the supply of affordable homes whilst also supporting the transition toward a low-carbon future. The initial target is 1,000 homes.

The forward purchase includes 148 semi-detached, nine terraced and 38 detached homes, which together will provide more than 179K SF of family housing. The properties form part of the wider Charlton School development by Vistry Partnerships.

The deep-green development aims for an A-grade Energy Performance Certificate and will also feature electric vehicle charging for every associated parking space, water recycling measures and an ecologist.

George Fraser-Harding, head of European funds at Aviva Investors, said the partnership planned to “create a family-oriented location which provides much-needed affordable homes to middle-income families”.

“We believe single-family rental is the next chapter in the evolution of the BTR story,” Packaged Living Managing Director Jonathan Ivory said.

The partnership was an abrupt turnaround for Aviva. Four years ago the house view was that BTR did not “meet an investor need”.