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25/02/2016

Lewis wants to hear about the private rented sector's needs

Words: Laura Edgar

Housing minister Brandon Lewis says he wants to hear from those working in the private rented sector (PRS) about what it needs to move forward and increase supply.

He also emphasised the importance of build-to-rent in achieving the government’s target of building a million homes by 2020.

Speaking at The PRS Forum today (25 February), Lewis said that build-to-rent “is at the heart of my plans”, as is ensuring more quality and quantity for people living in rented accommodation, supporting labour mobility, improving productivity and facilitating regeneration.

Recent growth and the commitment of investors has been “impressive”, according to Lewis, but the goal “must now be that that progress is not just sustained but expanded dramatically”.

“I want to see a million homes built in this country across all tenures” – Lewis

The PRS has a “huge opportunity and a huge part to play” in seeing a million homes built by 2020, said the minister. He conceded that there are viability issues – competing for land and land prices - which are an ongoing concern for the sector, and that the role of local authorities is “vital” in mitigating these challenges, something he said he would shortly be writing to planning departments about.

Lewis emphasised that he wants to hear from the PRS about what it wants.

“Do we need a special planning use class for private rent or is there a better approach? Are there still market failures that we need to address and what do you see as the role of the public sector land programmes? You in this room are in the perfect place to have those discussions.”

He wants the sector to come to a “clear unified position” on what it wants.

“There is a huge split of opinion within the sector itself about what it needs, not least of all on use classes […] We need a united voice for the sector.”

What is needed to catalyse the PRS market?

The housing shortage in London is putting at risk the capital’s “greatest success mantra” – “its ability to attract and retain talent nationally and internationally”, Paul Vernon, chief executive, Grosvenor Britain & Ireland, told the The PRS Forum audience.

Success, he said, “rests heavily” on the sufficient quality and quantity of housing of all types as well as mixed neighbourhoods with rich histories that offer a unique lifestyle for that talent. Vernon said the response to the housing shortage must not just be about more units, but new and growing urban neighbourhoods in London, made up of mixed incomes, backgrounds, life stages and jobs.

He asked what is needed to “catalyse the market” such as is seen in New York, where two-thirds of the population rent. Vernon prioritised two points:

  1. A step change increase in the supply of developable land. He said in London this would require a “muscular interventionist mayor”; a mayoral delivery body that “identifies, assembles and designates” sites for development, maximising the potential of public land and using compulsory purchase order powers if necessary. It should also, Vernon explained, put in place the necessary infrastructure and then sell plots to those who want to build, subdividing larger sites to accelerate delivery.

  2. Vernon believes a “clear and unambiguous planning policy for build to rent” is needed. At present, build-to-rent investors and developers “just don’t know where they stand” in London. “The Greater London Authority has a draft broad policy statement that each borough is interpreting differently. This ambiguity is creating a stand-off between planning authorities and the private sector and is holding back the investment of substantial private capital. I think we need a clear, city-wide framework that recognises that the economics of building rental homes are different to those of building homes for sale. And that therefore requires a different approach.”

Vernon concluded by posing a few questions:

  • Is catalytic change needed to unleash the build to rent sector?

  • If so, what form might this take and what leadership should the government, the borough, and the mayor take?

To share your opinion on Vernon’s questions, please visit The Planner’s think tank on LinkedIn.

The PRS Forum was organised by London First and Movers & Shakers

Image credit | Department of Communities and Local Government

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