7 Mar 2018
Policy area: Residential
The British Property Federation (BPF) welcomes Government’s formal recognition of Build-to-Rent – new, professionally-managed homes built for renters – in the National Planning Policy Framework (NPPF).
With a target of 1.5 million new homes by 2022, Government has rightly acknowledged that all housing tenures, including both homes-for-sale and Build-to-Rent, must be firing on all cylinders.
This formal recognition in the NPPF stipulates that local councils should plan for Build-to-Rent and that the sector is exempt from the provision of affordable homes-for-sale – rather, Discounted Market Rent, or what is now known as Affordable Private Rent, should be accepted.
For investors and developers seeking to grow the sector, typically institutional investors who manage pensioners’ savings, this separate assessment in planning guidance is a significant boost.
The revised NPPF, however, will only be effective if local councils across the country understand the benefits of Build-to-Rent, including its potential contribution to solving the housing crisis.
With this buy-in, Build-to-Rent is set to revolutionise the UK’s rental market with its commitment to offering longer-term ‘family-friendly’ tenancies, a key priority for the Prime Minister as set out in her housing speech this week.
The BPF launched a three-year pledge on behalf of the Build-to-Rent sector last year, which signalled a promise to offer family-friendly tenancies, such as for three years, for those who want longer-term stability when renting.
The BPF’s report Unlocking the Benefits and Potential of Build to Rent, produced by Savills, estimates that Build-to-Rent has the potential to make up a quarter of the UK’s housing shortfall (when the Government’s target was 250,000 new homes each year), and so it has a major role to play in supporting local councils to add to housing supply – at a time when the housing supply-demand imbalance continues to underpin the housing market’s unaffordability.
While the sector is a relatively new phenomenon, the BPF’s latest research on Build-to-Rent, which tracks its growth quarterly, shows that this is not a concept only for London – it is gaining traction regionally. There are now 105,214 build-to-rent homes in the UK (in planning, under construction and complete), with 59,271 in London and 45,943 in the regions.
The Prime Minister has called for faster delivery of homes. The delivery of homes-for-sale has been historically linked to the rate of sale. Build-to-Rent breaks this link. Build-to-Rent’s investors seek long-term rental income, and so are keen to develop Build-to-Rent at scale and ensure their customers are happy and that the experience of renting is an enjoyable one.
Melanie Leech, Chief Executive, British Property Federation comments: “Build-to-Rent has truly come of age this week, with formal recognition in the Government’s revised NPPF that it must be treated differently to homes-for-sale.
“Our members have billions of pounds of investment ready to invest in the sector, and we welcome the impetus from central Government to grow the sector, adding to much-needed supply of new homes. Local councils have been both leaders and followers in supporting the sector, but I hope most will now get behind it, because a well-functioning housing market should meet everyone’s housing needs.”