Putting build to rent on the map

5 Jul 2016

Policy area: Residential

In one of eight articles for the BPF Annual Review 2015-16, Duncan Salvesen, Chair of the BPF Residential Board, reviews the trends that have dominated the sector in the past twelve months, as well as what lies ahead.

The past 12 months have been seismic for our residential work, as housing has risen to the top of the nation’s policy agenda, driven by the Prime Minister’s commitment to deliver one million new homes before 2020.

Our focus has been on the build to rent sector, which we have taken to local and national influencers over the past year. We have organised two parliamentary receptions, a roundtable with the Housing Minister, a ComRes survey of MPs’ views on the sector, a programme of five workshops with the nation’s planning officers, our best ever attended residential dinner and conference, and the launch of a BPF Build to Rent Manifesto and a London Mayoral Manifesto for Housing. We have also lobbied successfully to amend the Mayor’s Supplementary Planning Guidance, retain the Guarantee Scheme for a further year, and ensured that any Starter Home requirement on build to rent developments is provided offsite.

Since much of the government’s focus has been on Starter Homes and home ownership, we have also actively engaged with government to help find ways of delivering these aspirations, while making the case that build to rent is a credible and important contributor to the delivery of those one million homes. The sector’s growth this year has shown not only its potential to do this but also why it needs continued support and nurturing. Our build to rent map, launched in October, shows over 55,000 units now in the development pipeline across the UK – but there are challenges to be overcome if this growth is to continue.

Government’s decision, announced in this year’s Budget, to hit institutionally backed rental property with a 3% SDLT surcharge is a setback to investment – both directly and through the message it sends to would-be investors. It will be essential in the coming year that the government, both on a national and a local level, voices its support for the build to rent sector rather than spook investors any further. We will continue to urge our connections within national government and local government to look favourably upon the sector, but they must become more vocal with their support to encourage further development.

In London, the importance of the build to rent sector should not be underestimated, as it currently represents one in five housing starts in the capital. The previous Mayor’s decision to target 5,000 build to rent homes per year has been helpful in encouraging local authorities to support the development of covenanted build to rent homes and adopt the use of discounted market rent (DMR) as policy. In the coming year we will be engaging with new the Mayor, Sadiq Khan, and his willingness to engage with the industry on his housing policies is a positive starting point – although talk of rent controls has caused concern in the sector.

Our national agenda for the coming year is already taking shape. We will be pursuing government buy-in for specific policies to support the sector, including permission in principle for build to rent, the acceptance of DMR as affordable housing provision, and flexibility on space standards. We will also be campaigning to ameliorate the impact of the government’s SDLT surcharge. And finally, we will begin a programme of engagement and education with council members to explain the benefits of build to rent, to ensure the past year was no flash in the pan, but the year that the build to rent revolution began.

- Duncan Salvesen is Chair of the BPF Residential Board and Director at Dorrington