Housing and planning minister Brandon Lewis has jumped to the defence of the government’s efforts to promote the private rented sector.
“Thanks to our dedicated Private Rented Sector Taskforce, we’ve identified more than £10 billion in potential investment for homes specifically built for rent,” says Lewis in a letter to the Financial Times, just published. He insists the £1 billion Build to Rent fund, designed to pump prime development of long term rental housing, “is well on track to have contracts in place for up to 10,000 new homes specifically for private rent by March 2015″.
Lewis’s decision to leap to the defence of government initiatives comes after a critical article in the Financial Times, published on July 29. That article noted the failure of a £7 billion guarantee fund, half to support affordable housing development and half for private rented projects. “Whitehall had planned to back investors who bought rented homes, but the structure of its guarantee did not cover the construction period, which is seen as the riskiest part of the housebuilding process,” said the FT.
Emma Reynolds, Labour’s housing spokesman was quoted being critical of the scheme’s failure, while James Coghill of Savills also noted that the market had failed to be inspired by the government plan.
Separately, the Build to Rent funding – a loan from government that will have to be repaid – has seen some take-up and was described by Coghill as a “catalyst”. That initiative has not been without criticism, however, and required developers to bid for a tranche of funds, then wait for due diligence to be completed. The complicated nature of the scheme has, according to other reports, pushed some developers to choose open market sale instead as a simpler exit from housing projects.
In his letter, Lewis insists the original article “portrays an inaccurate picture of our efforts to build a bigger and better private rented sector.”