A new model of British homes is suggested in an influential new report out this morning, whereby institutional investors such as pension funds will be encouraged to fund the mass-scale building of private homes for rent. Planning laws would be used to ensure that the properties were available to let for a fixed period, so that investors could be certain of returns, and developers of build-to-let would be excused the normal requirement to build affordable homes.
Sir Adrian Montague was asked by ministers to come up with ways to tackle the UK's housing crisis, and specifically the shortfall in the private rental sector amid concerns that the private, mostly small-scale, buy-to-let landlords who have traditionally supplied the sector will be unable to keep up with demand.
His report makes a series of sweeping recommendations, including getting councils to review stalled building sites to see whether some of the homes originally planned should now be made available for rent rather than purchase.
There could also be measures to get redundant public sector land and buildings made available for build-to-rent schemes.
In areas with a high demand for private rented housing, land would be made available to developers on the basis that a proportion of the homes were let out and not sold.
The report also calls for a code of standards so that tenants knew what standards to expect of new rental developments.
Housing minister Grant Shapps said: "We're determined to encourage greater investment in the build-to-let market and boost the country's private rented sector, which plays an integral role in meeting the nation's housing needs and aspirations.
"A major part of this is to attract and encourage new players to the market, while at the same time avoiding the excessive regulation that would force up rents and reduce choice for tenants."
The British Property Federation welcomed the report, saying the proposals ‘could unleash unprecedented investment in house building from pension funds, insurance companies and REITs [real estate investment trusts]’.
Chief executive Liz Peace said: "Encouraging institutions into building homes for rent has for some time been seen as the holy grail in enabling a long-term private rented sector which is designed and built to let and offers renters something a bit different in the marketplace.”
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Comments
makes you feel sorry for all the prople in history fighting to get social housing for the low paid.....little did they realise 50-100 years later,feudal britain would return
in europe they have a good rented sector but you don't have crazy prices and you can lease for 7 years or more....and redecorate
what we have here is the economics of madness
@Orchard on 2012-08-23 13:23:31
Prices in real terms can only come down if wages, and material costs come down.and the ever increasing government legislation is reversed. Even then it will take some time?
And with those words sailed off the property owning democracy we had been drifting towards for the last few hundred years to usher in a new era of 'council owned ghettos' or feudal seigneuries. Not sure I fancy either much. There is only one solution to this: property prices must go down to make them affordable for the next generation ..... who would want to live in a purpose built ghetto on 2 month's notice for their whole lives? Last one out of the UK turn off the lights as we all flee to somewhere we can buy a house.
That is a great idea and would avoid the creation of council made ghettos if sites were a mix of rental and purchase.
However there is a very good reason why this model does not exist, namely the price of new builds compared to the rent achievable. This is why most private rental property is old.