Build to Rent sector sets out plan to build 250,000 new homes for long-term rent
The Better Renting campaign’s letter, signed by 11 companies, says that Build to Rent, where corporates build clusters of homes that are rented and not sold, could help the government deliver its pledge to build a million homes by 2020.
The letter claims that traditional housebuilders are at full capacity and that support for corporate landlords could bring £50bn of new money into the sector.
Better Renting for Britain is a campaign group set up to promote and support a professional, long-term rental market. The letter asks ministers to set aside an agreed proportion of public land for Build to Rent development. Councils and public landowners could generate long term rental income from buildings or land, allowing them to fund under-pressure public services.
The group also calls on the chancellor not to apply an additional 3% stamp duty charge to professional Build to Rent developments. Last December, he promised to only apply this to buy-to-let investors, but subsequently reversed this pledge. The group claims the move will dampen investor appetite to build more homes. It could deter further investment which could build more than 250,000 new homes.
Finally, the campaign’s letter calls for recognition of Discount Market Rent (DMR) homes as an accepted form of affordable housing. This would allow developers to create subsidised rental homes as part of their development commitments, following successful use of the policy in the London boroughs of Ealing, Greenwich and Brent. A nationwide recognition would deliver more affordable housing.
Signatories to the letter include Grainger Plc, Essential Living, LaSalle Investment Management, HUB, Fizzy Living, Real Star, Hermes Investment Management as well as Mishcon de Reya, a leading city law firm.
Martin Bellinger, chief operating officer at Essential Living, says: “Until we face up to the fact that promoting homeownership at all costs will lead us nowhere, Britain will not overcome its housing shortage. The housing minister has been very supportive of Build to Rent, but what’s crucial is that the prime minister and chancellor recognise the contribution this could make to helping them keep their promises on building a million homes by 2020.”
Helen Gordon, chief executive at Grainger Plc, the FTSE 250 landlord, says: “Our vision is for a better rental market, underpinned by good value for money for our customers, supporting economic growth and housing supply. We are looking to invest hundreds of millions of pounds into new rental homes, designed specifically for the renting, which we will directly manage for many years to come. It is important that the government does all it can to allow us and companies like us to build more homes.”
Chris Taylor, head of private markets at Hermes Investment Management, says: “Experience from the US, Germany and Holland demonstrates the potential capacity for a vibrant Build to Rent market here in the UK which could easily reach £75bn, given government support. Crucially, this investment will typically be long term institutional programmes committed to providing institutional quality and professionally maintained, purpose built rental blocks. Designating sites as suitable for Build to Rent in local plans, as well as identifying public land sites, will greatly assist new supply.”
Andrew Stanford, UK residential fund manager at La Salle Investment Management, says: "The clear political imperative around encouraging massive global investment into British infrastructure and business is something everyone supports. Right now, there is a once in a generation opportunity to harness a large portion of potential investment and direct it at housing built solely for rent. Ministers should consider the long term benefits of proactively supporting Build to Rent to deliver homes right now and for the next generation."
Susan Freeman, partner at Mishon De Reya, says: "The UK needs a professional Build to Rent sector to meet the increasing demand for good quality rental product. The government should be actively encouraging further investment in Build to Rent development to boost the number of new homes available as rental is an important part of the solution to the housing crisis.”