18 March 2025
At Sigma Capital, we are celebrating our 10-year build-to-rent birthday! As part of the celebrations, our team, along with our key housebuilding partners, came together to reflect on a decade in the industry, outlining learnings to date and exploring what the future of BTR could look like.
From a vision to reality: the origins of our single-family product
More than a decade ago in 2013, the build-to-rent sector was very different. We were five years out of the financial crash, and the market was hesitant and unsure.
Sigma’s CEO and founder, Graham Barnet, met CEO of housebuilder, Countryside, Ian Sutcliffe, to discuss bringing this brand-new product to market. At the time, Ian and Graham found that competitor stock for the single-family housing market was incomparable to the model that they wanted to create. The market was disenfranchised, with individual landlords, poor availability and low standards. A professional, suburban rental product just did not exist.
Graham and Ian knew that if they could work together to get the product off the ground, bringing good quality new-build housing for rent to the fore, the market would eat it up. From their research, they knew that there were plenty of good quality tenants who had nowhere to go, not being able to afford the upfront deposit to buy. These tenants wanted a nice place to live, and the market simply wasn’t providing a solution for them. To Graham and Ian, it was a no brainer. But, to everyone else, it would be an uphill climb to convince them.
Ian Sutcliffe, former chief executive of Countryside Properties and now non-executive director of Sigma Capital said:
“Graham’s tenacity in convincing the banks and investors who couldn’t see the vision was admirable. A decade later, the single-family product seems so obvious, but bringing together the builder, the investor, the land and the local authority was difficult, and stitching it all together took sheer skill. 10 years down the line, it is a fantastic achievement for Sigma, and it turned out exactly the way we wanted it – a superior product. Our partnership has been built and established on trust – we worked together with a mutual understanding that it would be a lot of give and take to get this revolutionary product off the ground. Sigma is a great partner from a building and investor perspective, and if I were a tenant I’d be saying the same thing.”
Graham Barnet, CEO of Sigma added:
“We knew that this would be a fundamental asset class if done right. Everyone needs somewhere to live. At the time, there was plenty of finance out there if you were able to buy, and plenty of options for affordable social housing, but none for those families who were economically active, but didn’t qualify for Government support. Supply in the PRS was limited, and there was no process in place.”
Once Graham and Ian had got the initial site off the ground, it became easier to convince people. From there, the two were able to create a framework for Sigma and Countryside to work together in mutual interest, which today has been scaled across multiple partners.
Ian Kelley, Chief Executive of Kellen Homes, one of Sigma’s other key housebuilding partners also praised the partnership model. In 2024, Sigma and Kellen Homes reached a £250m investment milestone after just 20 months of working together:
“Working with Sigma, we were able to find a model that really worked for us. We needed a land model on a mixed-tenure basis with the ability to build at scale. Lots of the sites were wastelands, but once we started to build rapidly with Sigma, we were able to put infrastructure in place and get tenants moved in, which in turn, boosted the houses we had on open-market sale. The sites quickly became a destination, and demand grew.”
Overcoming challenges and adapting for growth
Being the pioneers of single-family housing has led to learnings and challenges along the way. Ten years ago, there wasn’t a typical professional landlord, and that’s developed over time, as well as the need to manage expectations and educate the market.
Natalie Hughes, Regional Director of Asset Management says:
“We have had to learn to balance customer expectations with our professional offering. Over time, we have brought the lettings and property management capabilities in-house, to currently serve Sigma’s own balance sheet portfolio that is taken to market under Sigma’s Simple Life Homes brand, giving Sigma better control over the desired customer experience and unlocking the ability to be more reactive to any required changes. We’ve recently noticed a massive rise in renters feeling empowered to voice their opinions and wanting communication to be quicker than ever. In response to this, we’ve created an app which allows things like maintenance requests to be logged and dealt with, within a short timeframe, and that technology is playing an important role in managing expectations. It’s all about making our systems as efficient as possible and consistently reviewing everything we do to stay ahead of the game.”
There was also the challenge of driving investment to regional areas outside of London and a difficult planning system.
Mike Scott, Group Legal Counsel commented:
“We were able to overcome this challenge by communicating the benefits to investors and the banks alike, so that they were able to understand the levels of demand that stemmed from targeting a large proportion of the country, as well as the state of the housing market at the time. A lack of high-quality rental options from accidental landlords was prevalent.
“Once investors were on board, they were able to see the vision, due to low financial risk, thanks to the granularity and spread across multiple developments around the country.”
Listening, evolving and setting new standards in BTR
Much of our success comes down to being able to meet the market where it is.
Jason Berry, Regional Managing Director says:
“Rental demand has always been there. The key difference in what we did was to get into the suburban product. Previously, it had all been city centre apartments, with amenities, and we wanted to establish new homes in a good location, with plenty of outdoor space where you can raise a family. I believe that even today, we’ve only scratched the surface of the market, in terms of demand vs stock, and now that the market awareness is there, scale can happen quicker than ever.”
“Our Simple Life rental product has also changed over time, becoming ahead of the curve on many market demands. Simple Life was one of the first professional landlords to allow pets at no extra rent or cost, and recently, a partnership with Vistry Group established SFH BTR’s first gas-free heating developments, with three sites now operating with air source heat pumps as an alternative.”
Luke Lightfoot, Regional Director of Asset Management said:
“We can maintain a high operational efficiency thanks to our great housebuilder relationships and our operations as a well-oiled machine delivering scale. We have more of a say in the standardisation of our product, to create high-quality homes, and we’re now seeing housebuilders go on to model that specification and sell it to the wider industry.
“The key to managing a large portfolio of properties is to understand that tenants want a good house, in a good location, with good service. Our standardisation makes this as straightforward and predictable as possible, resulting in quicker repairs, lower running costs and a better customer experience.”
“Our standards have increased immeasurably, and we’re never just a faceless landlord. We’re always willing to listen to feedback, be it from market research, satisfaction surveys or monitoring on-the-ground resident feedback. There is no one else to look at, so we cannot afford to become stagnant.”
The next chapter in single-family housing
Even though our BTR SFH product has evolved, with new tech and ESG features, and the market is everchanging, our principles have remained the same: well built houses to meet market demand, with strong partnerships to deliver them.
And the proof is in the pudding. We’re celebrating a significant milestone, with over 12,000 homes completed or underway, across c.172 transactions.
Rob Sumner, Residential Investment Director says:
“Less than 12 months ago, we took the decision to internalise our lettings and property management for our balance sheet portfolio, and we further celebrated a huge milestone at the end of 2024, letting our 1,000th home from our own balance sheet, and we’re expecting to reach over 3,500 properties on Sigma’s own balance sheet by the end of the year.”
Demand for single-family housing is higher than ever, and we’re confident that BTR can play a pivotal role in delivering housing at scale to meet that demand. Just last year, we saw over 30,000 enquiries for Simple Life properties from our website alone.
And now, thanks to new legislation, local authorities are finally catching on to the benefits of BTR. According to the British Property Federation, two-thirds of local authorities in the UK are bringing build-to-rent forward as part of their housing delivery plans.
Graham Barnet summarised the roundtable discussion:
“Over the years, our team has remained small in numbers, but we’ve been able to operate at high efficiency, and I attribute that to our brilliant culture. We believe it’s important for people to have autonomy in their work, and as a result, our team has bought into the vision and want to make a difference in being on this journey with us. Many of our team at Sigma today were there in the beginning.”
“Thanks to the tenacity of that team, we’re exactly where we wanted to be, with a superior product and unrivalled satisfaction scores. Our model is a best-in-class example of delivering high quality homes, and we’re looking forward to continuing to set the standard over the next decade and beyond.”
2025 is set to be a transformational year for the industry, and we’re looking forward to leading from the front.
