Tom Livelli: Why Private Investors Can Play a Key Role in Easing Housing Supply

Housing has become one of Europe’s most persistent policy challenges. Millions across the continent are struggling to get on the housing ladder as prices surge, while rising rents continue to squeeze middle and lower-income families.

Since 2010, EU house prices have risen by nearly 60 percent, while rents are up 28 percent. The UK has experienced a similar pattern and even more aggressive rental growth. JLL last year estimated that 23 million households across Europe and the UK are ‘overburdened,’ spending more than 40 percent of their disposable income on housing.

Europe doesn’t just have a housing shortage; it has a delivery problem. Governments can’t build fast enough, and smaller local developers can’t build affordably enough. Closing that gap requires investors who are willing to think differently about affordability and deliver at scale.

The solution lies in governments and the private sector working more closely together to solve affordable supply. While many institutional investors focus on the higher end, the “missing middle” (homes that combine quality with genuine affordability and without unnecessary bells and whistles) represents a compelling opportunity. EQT’s experience demonstrates the potential for aligning affordability with performance.

Build-to-rent as an asset class

EQT is already putting this philosophy into practice across Europe. In London, its build-to-rent (BTR) portfolio shows how thoughtfully designed rental housing can stay affordable. BTR projects are often financed by institutional investors and are designed to meet a shortfall in quality rental-only accommodation in major cities.

The EQT projects, comprising more than 1,400 units, are located in London’s Zones 3-6, close to transport, parks, and daily conveniences. By focusing on efficient layouts and energy-saving design rather than luxury extras, EQT’s ambition has been to deliver quality homes at accessible rents. Occupancy has remained strong through multiple market cycles, demonstrating that well-located, sensibly priced rental housing is both resilient and in high demand.

In France, EQT’s Mobicap platform addresses a different kind of housing gap: modern, independent living for seniors and people with mobility needs. Apartments are purpose-built, safe, and affordable, costing far less than a care home, yet offering greater comfort, convenience, and dignity. Mobicap has grown into a national platform designed to meet a social need while delivering long-term housing solutions that align with institutional ownership models.

Further south, EQT’s student-housing platform in Spain was designed to be affordable for domestic students, a group often priced out of purpose-built student accommodations (PBSA). Instead of cutting back on specifications or common areas, EQT adjusted unit layouts, favoring “twodios” and “threedios” (smartly designed shared clusters where two or three students each have their own bedroom and bathroom but share a kitchen and lounge) over studios to reduce rent per student while preserving a strong sense of community. The result: full buildings and an institutional-grade portfolio.

Together, these examples show that affordability and performance can be compatible. With smart design, disciplined execution, and a focus on genuine social demand, private capital can help deliver the housing Europe urgently needs – and prove that doing good and doing well are entirely compatible goals.

Renewed Sense of Urgency

The urgency to act has never been greater. Europe’s cities power its economies, yet their housing systems are holding them back. Adequate supply fuels productivity by ensuring that talent can live close to opportunity. And yet, over the past decade, the total stock of affordable rented homes in the UK and EU has grown by just one percent. In short, Europe’s most productive cities are becoming victims of their own success - not constrained by demand, but by the inability to build efficiently.

This has had damaging consequences for cities across Europe. In London, more than 323,000 households were on waiting lists for social housing in 2024 – more than double the population of Cambridge. In Stockholm, the average waiting time for a rent-controlled property is about 10 years.

If cities fail to provide enough housing, the entire economy suffers. In 2020, The Economist estimated that if New York, San Francisco and San Jose relaxed planning rules, then U.S. GDP could be 4 percent higher. At the moment, developers face onerous regulation on land-use through the planning or permitting system. Across Europe, the permitting process can be slow, expensive, and a barrier to entry for smaller developers.

Looking ahead, new energy performance regulations will further complicate the picture. The European Commission mandates that by 2030 all of the EU’s housing stock must achieve an energy performance certificate (EPC) rating of at least E, rising to class D by 2033. Around a quarter of EU housing stock falls below class E, while about half is below class D – yet many private landlords lack the capital to retrofit. Unless institutional capital is mobilized to modernize this stock, thousands of rental units could disappear from the market, worsening the shortage.

These regulations, while well-intentioned, will accelerate obsolescence. Many private landlords will not have the capital to update their property, and more units will fall out of the rental stock as a result.

Beyond regulation, Europe’s housing delivery is constrained by rising construction costs, labor shortages, and rigid land-use rules that limit density, especially around transport nodes. Furthermore, the new housing that does get built is often misaligned with demand – in particular, luxury units outpace the supply of affordable and mid-market homes.

Meanwhile, fragmented financing markets and demographic shifts are adding further pressure. Together, these forces threaten to widen the gap between what cities build and what their residents can actually afford.

Workable Models

Governments should revisit how they work with private capital to accelerate affordable housing delivery. EQT’s experience shows what’s possible. JLL estimates that fully addressing Europe’s affordable housing shortfall would require an additional €5.3tn in investment.

The UK’s experience with the build-to-rent sector reveals some valuable lessons. In 2004, there were just 972 BTR units nationwide. Twenty years later, there were nearly 90,000. Although BTR still represents only 2 percent of the private rental market overall, its share is meaningfully higher in major cities such as London, Manchester, and Sheffield. What it shows is that when capital, design, and operations align, new housing can be delivered efficiently and affordably – even in constrained markets. Since 2019, BTR has accounted for more than a third of new build delivery in Brent and Newham, transforming previously overlooked parts of the capital.

I believe that further institutional investment should be encouraged. Renters in BTR properties face none of the frustrations common with absentee or amateur landlords. Institutional owners preserve value over the long term by maintaining quality and ensuring tenant satisfaction. This isn’t speculation; it’s good stewardship, and Europe needs more of it.

BTR will never dominate the European housing market – nor should it. Even in the U.S., which is a far more mature market, only about a third of the rental units are institutionally owned. But its success shows what’s possible when regulation, design, and capital align around quality, scale, and affordability. If policymakers create the right frameworks and investors continue to innovate, Europe’s present housing crisis has the potential to become its next engine of growth.