A consortium of developers has called on the next government to push through planning reforms to boost the delivery of private-rental sector new-build homes
The group, which is backed by the British Property Federation group and includes landlord-developers Grainger and Essential Living, and investor Jones Lang LaSalle, said the private-rented sector had access to £30billion in funding and could deliver 150,000 new homes over an unspecified time frame.
However the grouping, which names itself Better Renting for Britain, said spurring on the development of more private rented-sector blocks would require support from local authorities and a new approach to Section 106 planning-gain agreements related to new development.
It called on the next government to require local authorities to partner with developers to build some of their area’s identified need for private-rented housing on public land. Such moves have already been piloted on a voluntary basis in some council areas, such as Barking and Dagenham in east London.
Melanie Leech, chief executive of the British Property Federation, said supporting the build-to-rent sector would help the next government meet housebuilding targets pledged by all the main parties in the current election campaign.
‘It will help reinvigorate our city centres and support local authorities that want to help retain their young people who need homes,’ she said.
‘And most importantly, for renters, it will revolutionise the sector, providing greater choice of tenure length, rent certainty and high levels of customer service.’
Andrew Brentnall, of property firm Savills – which detailed the £30bn figure, said build to rent had the potential offer a large amount of capital to support the development of new homes in places they were needed most.
‘Private renting has increased by 79% since 2003 and institutional investment is vital for its continued growth,’ he said.
‘If the considerable demand from new tenants is not met by new stock, rents will rise due to lack of supply. It is therefore very important to attract, and retain, new investment into the sector. Our forecast is that rental demand will rise by a further 1.2 million households by the end of 2019.’
However, the property industry call has not been met with universal support.
Alex Hilton, director of campaign group Generation Rent, said some of Better Renting for Britain’s demands amounted to public subsidy for the provision of market rents.
‘[Their] campaign calls for a free market yet asks to build their homes on public land – homes that will be let at market rents and therefore presumably unaffordable for people on low incomes,’ he said.
‘The priority for public land should be the millions waiting for social housing – not the profits of investors asking for handouts.’
The campaign’s five demands
- Councils should identify how much rented housing they need and allocate land to it. They 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; and
- Work with us to promote best practice, better inform the public and help improve the perception of the entire rented sector.