Build To Rent – At Scale or At Risk?

It would be pretty difficult to have missed the meteoric rise of the PRS Build to Rent sector in the last 12 months. But in a country which places such huge emphasis on home ownership, is this new tenure model already doomed before it’s really begun?

This was the topic at hand at  the PRS Conference I attended recently, when hundreds of developers, investors, planners and housing experts came together for a day of – often heated – debate, discussion and navel-gazing about how, or indeed if, industry and government should come together to mobilise the build to rent sector as part of the wider PRS offering. With the British Property Federation suggesting there are as many as 30,000 Build to Rent units in the pipeline with planning permission, could 2016 be the year that building for renters comes of age?

The morning started with a plea from Housing and Planning Minister, Brandon Lewis, to unite as an industry and tell Government what it needed to do to enable growth and support this flourishing sector. He also stressed the importance of professionalising the private rental sector as a whole, citing the US rental market as a particularly inspirational example of how private renting can be institutionalised. Of course, there are already some encouraging signs of this, with the US National Apartment Association (NAA) now launching its UK counterpart, the UKAA, with a conference planned for October 2016.

Given the Government’s push for home ownership however, does it makes sense to build rental homes? Yes, very much so. In London alone, it’s estimated that in the next ten years, 60% of Londoners will be renting. And whilst there is a lot of talk of ‘trapped’ renters who can’t afford to buy, there is equally a recognisable shift in renting becoming the alternative tenure of choice, and one of not necessity. This is what’s driving the demand for appropriate rental homes – it’s simply not enough to recycle homes built for ownership into the buy-to-let market.

As the conference progressed, there was a general consensus emerging in terms of how the industry needed to move forward and reach scale and volume. We had lenders telling us they had access to funds, central and local government telling us they wanted to support build to rent, researchers telling us the demand was there, and housing providers telling us they wanted to build – so what’s the problem?

Generally, it boils down to land supply, use class and planning complications, some uncertainty around viability and valuation, and added tax complications. And whilst some voices were calling for the Government to back off and let the sector ‘just be’, there was also the very divisive question of regulation, which brought us back around to the Minister’s point about ensuring the sector is professionalised.

It was evident by the numbers in attendance, and by the calibre of speakers at the conference that this sector is not going to go away. We have been designing and building quality new homes for decades, but designing and building them for renters is an entirely different proposition. Yet, it was clear from the opinions, examples, experts and funders at the conference that build to rent is poised for growth, with significant pent up demand from a burgeoning tenant population.

It was great to see that there are already a number of fantastic build to rent PRS developments being delivered across the whole country by the early pioneers – it seems that the industry and the Government are now trying to catch up.

Alex Evans

You May Also Enjoy

Breaking News

Nationwide House Price Index for October

Annual house price growth slows in October UK house prices rose 0.1% month on month in October Annual growth rate slowed to 2.4%, from 3.2% in September Headlines Oct-24 Sep-24 Monthly Index* 529.6 529.0 Monthly Change* 0.1% 0.6% Annual Change 2.4% 3.2% Average Price (not seasonally adjusted) £265,738 £266,094 * Seasonally adjusted figure (note that…
Read More
Rightmove logo
Breaking News

Rightmove’s weekly mortgage tracker – 31/10/24

  The average 5-year fixed mortgage rate is now 4.64%, down from 5.36% a year ago The average 2-year fixed mortgage rate is now 4.91%, down from 5.81% a year ago The average 85% LTV 5-year fixed mortgage rate is now 4.66%, down from 5.44% a year ago The average 60% LTV 5-year fixed mortgage…
Read More
Breaking News

Breaking Property News 31/10/24

Daily bite-sized proptech and property news in partnership with Proptech-X. Labour’s first Budget – A missed opportunity for meaningful change A property industry insider view of  the Autumn budget   Rachal Reeves the new Chancellor of the exchequer unveiled a £40 billion taxation budget in her autumn statement. Reeves says it is a moment of ‘fundamental choice’…
Read More
Estate Agent Talk

Tips to Help Children Adjust to a Long Distance Move

Moving to a new place far away and leaving behind what kids know can be frightening. Careful planning and communication between all parties are essential to ensure this transition goes smoothly. This article offers invaluable tips for handling long-distance relocation with children to lessen your burden. Plan and communicate Preparation is the key to managing…
Read More
Estate Agent Talk

Tips For Staging Your Older Home ForSale

Selling an older home may be fairly challenging since you have to try to appeal to people who often adore modern amenities and finishes. Rest assured, with proper staging, your home’s unique charm will be brought out; it will feel updated, and its full market appeal will be realized. The following are helpful tips on…
Read More
Estate Agent Talk

Autumn Budget – Thoughts from the Industry

Following the Autumn Budget, here are some thoughts from the property industry.   Chris Norris, Policy Director for the National Residential Landlords Association: “Whilst the Budget spoke about protecting vulnerable people, it failed to confirm what we now know – that housing benefit rates will be frozen as of next year. “It makes no sense…
Read More