Build to rent push would unleash £30bn for housing
Developers, pension funds and housing associations claim the next Government could count on £30bn of private finance if it promotes housing for long term rent.
This would be enough to build more than 150,000 homes and ease pressure on the rental market – the fastest growing tenure in England.
In an open letter to the next government, supported by the British Property Federation, the Better Renting for Britain campaign says the Build to Rent sector could play a pivotal role in solving the housing crisis.
It calls for a five-point stimulus to create an American-style rental market where single companies own large portfolios of homes.
Build to rent stimulus
- Councils should identify how much rented housing they need and allocate land to it. It can ensure that housing is rented and not sold by agreeing covenants with developers.
- Idle public land should be used to generate income for councils by developing rental blocks.
- A modernised approach to affordable housing which recognises the wholly different funding structures relating to build to rent compared with housing for sale.
- The sector to continue operating as a free market, which is vital to securing investment.
- Work with us to promote best practice, better inform the public and help improve the perception of the entire rented sector.
“We want to create more professionally managed rented housing, purposefully designed and built with the long term occupier in mind,” the letter said.
The offer of longer-term tenancies, inflation linked rents and shared amenity spaces would be made possible because investors were seeking to earn an income – rather than speculating on house prices going up.
“We need genuine acceptance that Build to Rent differs from traditional housebuilding,” the campaign adds, referring to the fact that schemes built for rent are currently treated by planning policy in the same way as those built for sale.
The campaign wants the government to make councils set out the quantity of rental housing needed locally and then partner with developers to build some of it on public land.
This could create income for local authorities. It also wants planning rules modernised to reflect the fact that building for rent is wholly different from building to sell.
The group also wants a commitment to market economics to ensure vital new investment isn’t put at risk.
Martin Bellinger, chief operating officer of Essential Living, said: “Smart phones, taxi apps and the sharing economy have disrupted many things in recent years and now it’s our turn to positively disrupt the housing market.
“Renting can and should be about making people’s lives easier, offering them value for money and long-term certainty enabling them to create a home. By taking a long term view, we can do this and offer the next government a vital additional source of finance.”
Nick Jopling, executive director for Property at Grainger plc, the UK’s largest listed residential landlord, said: “By supporting ‘build to rent’, the future British government can encourage companies like ourselves to help increase housing supply and improve standards of living in the rental market.”
Aaron Morby | Fri 1st May | Construction Enquirer