A consortium of property developers, agents, pension funds and housing associations, coordinated by the British Property Federation (BPF), are calling for many more professionally built and managed housing developments for the private rental market.
Under the auspices of their “Better Renting for Britain” campaign the BPF and their consortium think that a US style rental market, where large developments of housing for rent are built and professionally managed, would be the answer to Britain’s housing shortage.
The aim of the campaign is to build and develop large blocks of rental housing in areas of high rental demand. There is potentially £30bn of private finance available, backed by government guarantees under the build-to-rent scheme, now available for delivery of housing for long-term rent.
The consortium group of around forty industry participants say that together they could provide around 150,000 homes for around 350,000 people. Homes for long term rent created alongside housing for sale could be delivered fast and soon but only with the right level of unequivocal support, BPF says.
The professionalisation or “Tesco-isation” of the private rental market is without doubt a threat to the profitability of the traditional small-scale buy-to-let investor, 70 per cent of whom own just one or two properties. But competition is often a good thing, raising standards all round, and the projected growth in the private rented sector over the next 20 years in Britain should be more than enough to accommodate the extra supply.
The campaign group are saying that: “an American-style rental market – where single companies own large portfolios of homes – is the solution to the UK’s housing shortfall”.
Melanie Leech, chief executive of the British Property Federation, told the Financial Times newspaper:
“Supporting the build-to-rent sector will help the next government [now this government post-election] meet the house-building targets that all the main political parties have pledged to voters during this election.
“It will help reinvigorate our city centres and support local authorities that want to help retain their young people who need homes.
“And most importantly, for renters, it will revolutionise the sector, providing greater choice of tenure length, rent certainty and high levels of customer service.”
An open letter, signed by representatives from 41 companies, calls for the rental sector to remain operating as a free market and for councils to allocate land specifically for rented housing.
The letter says the campaign group wants to create “more professionally managed rented housing, purposefully designed and built with the long-term occupier in mind”.
Nick Jopling, executive director for property at Grainger, the UK’s largest listed residential landlord, told the FT:
“Not only do we need to build many more homes, but we need to make sure renters get a better deal.
“As a business that’s been around since 1912, we want to see a rental market that provides long-term options as well as god value for money and customer service.
“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.”
David Stone, a partner with London-based Mansion House Capital, said:
“I think the issue is market liquidity. Regulation is reducing market liquidity after the mortgage market review, and we don’t want to see that in the buy-to-let sector.”
The consortium’s open letter calls on the government to do the following:
- Implement a national policy so that local authorities identify the need for market rented housing and allocate land supply to meet that need, using planning conditions or covenants to keep it in the rental market.
- Support an initiative for a Build to Rent industry team to work with UK wide local authorities to facilitate the delivery of substantial Build to Rent developments through innovative partnerships or innovative uses of public land which could generate significant income for councils themselves.
- Help us modernise the approach to delivering rented housing which recognises the wholly different funding structures relating to Build to Rent compared with housing for sale.
- Allow the sector to continue operating as a market, which is vital to securing private and institutional investment for additional housing supply.
- Work with us to find ways to promote best practice and better inform the public so we can help improve the perception of the entire rented sector.
In return for all of this, the consortium say the sector will work to deliver the potential £30bn of new housing and ensure everyone seeking a rental property gets a rental home. They pledge transparent pricing and service consistent with the rent they pay, ensuring that both short and long term tenants are dealt with fairly, as customers, fully in keeping with existing legislation.
The full BPF open letter can be read here
Is Large Scale Build-to-Let a Threat to Small-Scale Buy-to-Let? – http://t.co/TI1HvVRuEe
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