Private rented sector holds the key for housing shortage - BLP / BPF Seminar
- Date: 01/12/2014
Tenants will vote with their feet - but buy-in from local authorities is urgently needed to build quality private rented sector properties.
Partnership is the key to unlocking the full potential of the private rented sector (PRS), according to panellists at an event held by BLP Insurance and the British Property Federation on the critical role of councils in build to rent development.
(Photo: Seminar panellists L-R: Nick Jopling, Mark Farmer, Richard Saxon, Melbourne Barrett & Jamie Ratcliff)
Much has already been said about the commercial impact of the build to rent sector on the property market, and the need to design and build properties that investors require. The event, chaired by Richard Saxon, Non- Executive Director of BLP Insurance, and with panellists from EC Harris, the Greater London Authority, Grainger plc and Hammersmith & Fulham Council, sought to address the pressing issue of how best to work with the local housing authorities to ensure these proposed schemes come to fruition.
Brian Kilroy, Business Development Manager at BLP Insurance, comments:
“The Private Rented Sector (PRS) is a well assured model, particularly for developers and investors. There are an increasing number of schemes across the country currently in the negotiation phase and there is a real opportunity to bring more of these to fruition, particularly using institutional money, and this has to be the way forward.
“When we talk about PRS in terms of policy and strategy, we are all in agreement. Where all involved parties need to overcome their differing opinions is how these schemes will look and operate, both in terms of places to live and as vehicles for investment. Should design be approached for a type of tenant or asset class, or do we continue to pursue the specific build model which builders and the market are familiar and comfortable with? Housing is at the top of the agenda right now and a major concern across the country. With significant cross party support, local authorities, private developers and institutional investors all need to work together to meet the political, investor and tenant demand.
“Ultimately, the why is more important than the what, and councils need to understand both the motivation and the benefits. It is crucial that all local authorities are aware of the merits of build-to-rent as a concept. The attractiveness of the revenue model for PRS should not be underestimated. By turning a surplus site into an income stream, which could essentially provide revenue to support services in the local area, there is a longer term benefit to local authorities. Revenue returns are far more attractive model than capital release. Against a tidal wave of regeneration, there is also a critical role for PRS in accelerating a sense of pace making in large scale redevelopment projects.
“Discussions with local authorities need to be evidence based, highlighting clearly and transparently the benefits for all parties involved. With over 300 local authorities in England and the differing nature of every single project, there can be no one hard and fast rule. What is required is a set of minimum standards around management to help drive the asset forward. Mandatory registration of landlords is a clear example. Only by taking steps to remove the stigma that private rent is difficult to manage, can we hope to achieve a more even level playing field between PRS and owner-occupied units.
“There is a real responsibility to build quality properties which are fit for purpose for the long-term. The last thing anyone wants is to have to knock down these properties in 25 years and face the housing shortfall from scratch again – this would be a complete failure. This is an exciting opportunity to innovate and to use new methods of construction, such as build-off-site, that are much quicker and more efficient. Questions about regulation and technical standards in the PRS need to take into account these design considerations. A careful balance must be struck so that regulation doesn’t stifle or constrain this opportunity for innovation.
“This is not a discussion that could have taken place 12 months ago. But today, renting is no longer a second rate choice: a quarter of Londoners are already living in the PRS and this figure is expected to overtake owner-occupied over the next decade. While the cogs are already turning, we need to address the outstanding issues as a collaborative partnership to keep the momentum going and create a credible and successful build-to-rent sector.”
For further information please contact:
Lianne Robinson, Cara Penkethman, Henry Adams
Telephone: 020 7726 6111