New report calls for radical build-to-let programme
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.”
Article courtesy of LettingAgentToday
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