The ‘build-to-rent revolution’ proposed by a group of developers will have to wait until October for parliamentary approval, although one industry body is claiming a lot has already been done to strengthen representation.
A pre-election open letter at the start of May, co-signed by the likes of Hermes, Legal and General, Grosvenor, British Land and Grainger, stated an American-style rental market – where single companies own large portfolios of homes – could offer better value and greater transparency.
They pledged £30bn to the next government for new homes if they support the build-to-rent plans, which would have rents based on an offer of longer-term tenancies, inflation-linkage and shared amenity spaces, all made possible because the investment is to earn income rather than house price speculation.
The letter also called for 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, along with modernising planning rules to reflect the fact that building for rent is wholly different from building to sell.
Speaking three months after the Conservative’s general election victory, Ian Fletcher, director of policy at the British Property Federation, said they have been doing a lot to strengthen the build-to-rent representation over the past few weeks.
He mentioned the formation of a specific build-to-rent committee, chaired by the former chairman of the government’s private rented sector taskforce, Andrew Stanford, and vice-chair Adam Russell of Fizzy Living.
“It will now help drive the campaign and with significant new investments into build-to-rent announced over the past few weeks from the likes of L&G, M&G, Hermes and Patrizia, there is a lot of material to work with.
“The next likely campaign milestone will be engagement with parliamentarians when parliament returns in October to illustrate the supply the sector is delivering,” added Mr Fletcher.
During campaigning, the Tories pledged to build 200,000 starter homes for first-time buyers and extend the controversial Right to Buy scheme for up to 1.3m tenants of housing associations in England, along with the creation of a £1bn brownfield regeneration fund.
Last week, the government launched two initiatives to boost housebuilding, rolling out a £26m fund for developers to build homes for first-time buyers and unlocking £10m for local authorities to prepare more ‘brownfield’ land for starter homes development.
Communities secretary Greg Clark said the £26m fund will “pave the way” for the first wave of starter homes and show young homeowners the different types of properties they can come to expect from the scheme.
Meanwhile, up to £10m grant funding will be open to councils to assist them in bringing forward brownfield sites that are currently underused or vacant, helping carry out preparation, clearance and infrastructure work to make them viable for starter homes.
peter.walker@ft.com
