We need to cater for the growing demand for rented properties, says Essential Living’s Martin Bellinger
This year’s general election was the first in decades to feature housing as a major issue. While the amount of new homes promised varied from party to party, all agreed boosting supply was a priority.
But the type of homes we get will just be as important as the number. Britain cannot continue to solely rely on traditional house builders delivering your usual homes for sale. The growing demand for rental properties needs catering to as well.
The private rented sector nearly doubled in size between 2001 and 2011, and is predicted to overtake the social rented sector by 2020. Many have lazily blamed this growth exclusively on high house prices locking first-time buyers out of the market. But renting has become common in people of all ages and professions, and many are now also renting for longer.
A survey by Knight Frank found a third of private renters valued the flexibility renting brings, and did not want a mortgage. This makes sense: in today’s footloose job market, owning a home can be as much a burden as a bonus.
Yet until most politicians have offered little to renters, apart from bashing their landlord. While the housing minister Brandon Lewis has made a fantastic effort to support purpose built rental accommodation, the public mood still views landlords negatively. But if we, as a sector, can deliver an on offer inline with North America, there is scope to change perceptions.
We’re taking a design-led approach, which means our primary consideration is around how the buildings will be used. As the first company set up in the UK specifically to build homes for rent from the ground up, we cost in from day one every element of the building. As a long-term investor, backed by London-based fund manager M3 Capital Partners, we prioritise income returns and this is reflected in the decisions we take on materials and on building design.
The life-cycle approach will deliver better homes for renters, giving them better quality homes with long-term tenancies, a landlord who can be reached 24/7 and an institutional-grade home, which means the owner has a commercial imperative to keep it well maintained.
A crucial element of the Essential Living offer is shared spaces and amenities, helping create a real sense of community. An on-site concierge will help solve any problems, meaning the days of waiting for an unresponsive landlord to fix a leak are over.
This sort of innovation is viewed with suspicion by some planners. But we need to realise the world has changed and, at the same time, ensure our local planning authorities are not stifling the desire of institutional investors who have a key role to play in new housing supply. Further cuts to planning will only exacerbate the housing crisis.
The UK has the oldest residential stock in the EU, with just over half built before 1960, and only 11 per cent after 1991. When looking at the private rented sector alone, the situation is even worse.
We need to build and design homes differently. We think there’s great scope to improve the rental market and while this won’t solve everything, it could make a sizeable contribution of the additional supply we need. To some degree, we need to let go of the past, separate the investment and service elements of housing, and embrace the culture change affecting other areas of society.
Martin Bellinger is chief operating officer of Essential Living
Essential Living: 'Build to Rent must be a part of new housing supply'