A new report has called on councils to set minimum targets for the construction of long-term private sector rented homes. Local authorities should commit land to such projects, and also start to understand the value of private rented projects in local communities.
The report, compiled by law firm Addleshaw Goddard and the British Property Federation, says the private rented sector has the power to transform the UK housing market for the better. While politicians focus on affordable housing, this is often inaccessible to working, earning people – for whom purchasing a home is also becoming an increasingly impossible dream.
The report says there needs to be formal planning guidance to encourage growth of the sector, and a better understanding of it. It calls for a “covenant”, which would bind partners legally to build homes for long term rent. This would not allow homes to be sold off, ensuring certainty for both investors who know what they are getting into, and local authorities who don’t want to be accused of helping the private sector to excessive profits.
“Planning guidelines need to be stronger and financial viability models need to reflect the fact that building for long term rent is not the same as traditional housebuilding,” said Marnix Elsenaar of Addleshaw Goddard. “Policymakers need to appreciate that if they get this right they could unlock a model that provides thousands of new homes with real long term community benefits.”
The sector is growing, said Ian Fletcher, director of real estate policy at the BPF: “Acceptance of the role that the PRS has in providing the next generation of housing has never been higher – with many local councils conducting ground breaking deals in the last twelve months.”