Housing white paper: Rental failure

Despite predictions, the housing white paper did not deliver the ground-breaking advances we were hoping to see for build to rent in London. Although the brief recognition of future relaxation on planning rules for councils and longer term tenancy support is encouraging - market sale predictions and incentives for developers should have been addressed, to make this a far more viable option for the city.

Professionalising rental housing as a legitimate - and potentially superior - alternative to home ownership for today’s millennials must be further addressed. Receiving national recognition as a tenure to be included in local plans across the UK will help normalise rental, which, unlike in other European countries, is currently viewed in the UK as an option for those who can’t get onto the property ladder, instead of a genuine preference. The “Right to Buy” phenomenon is a relatively new concept that has developed over the last 60 years, and is something the UK could start to move away from as the Build to Rent model becomes more popular.

A key limitation of the announcement is the lack of clarity on how viability of build to rent will be assessed against market sale

The government, working with developers and local authorities on longer, more secure tenancies will be somewhat beneficial, although in my experience this is not a deal-breaker issue for today’s tenants. What this measure will do, however, is offer more security. The three year tenancy agreement, with the option of a six-month tenant break clause, puts tenants in control and tips rental into a customer service model. This is something that is becoming increasing popular in big cities such as London, where the likes of Get Living London are revolutionising rental by giving tenants both flexibility and stability - a stark contrast to the short-term leases offered by private landlords.

Build to rent gives the option to offer high-quality, affordable accommodation without the need to down-spec. It’s encouraging to see how the councils and developers that we work with are approaching affordable housing through discount market rent instead of offering a segregated, lower-grade product, especially as integrated living is the bedrock of service-led, multi-family culture of Build to Rent.

A key limitation of the announcement is the lack of clarity on how viability of build to rent will be assessed against market sale. At the moment sales prices are still high, putting housing developers in the strong position of being able to spend more for prime sites. The government must ensure the correct incentives are there to encourage developers to invest in a build to rent model, instead of the traditional tried-and-tested residential models that offer a quick return.

If build to rent had been higher on the government’s agenda, a clear message would have been sent that it is time to acknowledge this housing option, rather than concentrate on intensifying traditional housebuilding across the country. Higher quality rental accommodation at a genuinely affordable price is scarce in London, but this should be the rule, not the exception.

Simon Saint is associate principal at Woods Bagot