Elliott Lipton, CEO of developer First Base, is convinced the sector can grow without the need for government or planning support.
“The position is quite clear – the market demand for rental product is huge – and growing,” said Lipton, speaking at a MIPIM UK debate organised by Estates Gazette and sponsored by Macfarlanes. He said that despite concerns over returns, and the apparent greater appeal of developing for sale, the sector could deliver. “We can clearly see you can achieve that yield, if you develop to rent.”
Lipton said there was “profound unhappiness” among tenants right now who were crying out for better, more professionally delivered homes. Poor treatment, insecurity of tenure and the poor quality of buildings were issues. And regrettably these are often driven by a desire for short term returns – the same problem that blights the housebuilding sector. The stock market pushes volume housebuilders to sell, rather than hold assets to create an income stream, he said: “There’s a huge drive for short term results.”
Lipton also sided with those against further government intervention: “We don’t need a separate use class, and we don’t need incentives.” Planning options were already within the statutes, he argued, and local authorities have considerable flexibility: “Part of the problem is that officers don’t always understand their powers.”