UK institutions need to be part of the solution in resolving the UK’s housing shortage. “The private sector has a role in finding a solution,” insists Bill Hughes, managing director of Legal & General Property, in an opinion piece published by Property Week magazine.
Hughes notes that his organisation was historically a major owner of private rented housing, but this declined over time, with the move aided by the extension of rent controls by earlier governments. However, he now sees the mood of the UK consumer changing, away from an obsession about buying a property and towards the flexibility and other attractions of renting.
Today, just 1% of the nation’s private rented sector homes are owned by institutional investors, with private amateur landlords dominating. As a result, few homes are being built that are designed from the outset to suit renters i.e. homes with the right sized rooms, in the right places, that are easy to maintain efficiently.
Government, too, now understands the importance of renting homes, he says. “A vibrant rental sector is now recognised as being a key factor in the productivity of international cities.” Build to let will be just one part of a multichannel solution to the UK’s housing problems.
Hughes says L&G is already strongly committed to encouraging more homes. It has a stake in a house builder, is investing in student accommodation, and is lending to housing associations.
“Housing designed and built for long-term private-sector renting is virtually absent in the UK, despite being a large and mature investment class in both the US and Europe,” says Hughes. Here’s hoping Legal & General will take an active role In getting that private rented sector housing built.