With nearly twice as many households renting than 10 years ago, the rental market was always going to play a prominent role in the Housing White Paper.
Speaking on the BBC Radio 4 Today programme, Sajid Javid stated that people want a decent home to buy or rent, and the government should support their choice with both types of tenancies.
The first step he proposes towards achieving this is encouraging more institutional investors into the Built to Rent sector, a move that has been welcomed by the industry.
“It’s encouraging to see the government has now not only moved well away from a focus purely on home ownership in general, but specifically to see a specific consultation which could make a serious difference to the Build to Rent market,” Andy Barnard, Partner at International Law Firm Trowers & Hamlins. “The proposal to change the NPPF will encourage planning authorities all around the country to properly include Build to Rent into their plans.
“We all know that Build to Rent doesn’t work everywhere, but knowing the planning authority is behind it will improve confidence to bring forward opportunities where it does.”
However, one of the initiatives proposed comes with a cautionary note. The most radical measure mentioned within the White Paper is to introduce or ‘make available’ family-friendly tenancies of three years or more for those tenants who want them; this is framed as an initiative to support investor interest in Built to Rent, rather than a policy for the wider private rented market.
“The government’s plans to encourage build-to-rent by creating a separate affordable housing class could backfire,” warned John McAuliffe, managing director at McAuliffe Environmental. “The build-to-rent sector is currently enjoying massive growth, targeting sites between 50-100 units which larger housebuilders won’t touch. If the government imposes 20% affordable market rent, it will render some of those sites unviable and reduce end margins, which often rely on an element of open market units to assist viability.”
Nonetheless, the policy, aimed at giving renters more stability, would give the sector a much-needed makeover. “It’s positive to see a shift towards promoting other tenure options beyond the traditional model of homeownership, and ensuring consistently good standards for everyone,” said Neil Hadden, Chief Executive of Genesis Housing. “Genesis, along with other housing associations, has long ascribed to a ‘smarter’ and more open model of renting, which cuts out agency fees and hidden charges and offers residents the chance to properly put down roots with flexible and secure tenancies up to five years.
“Add in the option of decorating properties to your taste and a 24-hour emergency repairs service and it becomes clear that the sector is well ahead in challenging the perception of renting as a short-term option chequered with constraints and unpredictability.”