Private rental sector to play a crucial role in providing much needed homes in the UK
The private rented sector will be crucial in the UK’s recovery from the housing crisis and the build to rent sector is growing at a time when more rental properties are needed, a property industry conference has heard.
The British Property Federation’s annual residential conference, hosted by Deloitte Real Estate, also heard that some local authorities are already at the vanguard of welcoming what is a very different private rented sector offer and are helping to open doors to a more diverse range of housing.
Central government has also been doing its bit with the £1 billion Build to Rent Fund, and support through revised planning guidance. London’s Mayor has also shown confidence in the sector, making build to rent part of his annual housing target of 42,000 units.
Making renting more attractive is also part of the recovery. Large scale private rental sector operators such as Get Living London, Essential Living and FizzyLiving have already introduced incentives such as long term tenancies, no fees and professional management, which lead to tenants staying and brand loyalty.
‘The BPF conference provides an opportunity for the housing sector to commit to viable, long term solutions to meet housing need in this country. We know we must build more homes, but meeting housing need goes far beyond this. We should be focusing on providing choice and a housing journey which enables people to fulfil their aspirations. My hope is that we will see a commitment to that approach,’ said Paul Tennant, chief executive of the Orbit Group.
The conference heard that the UK can learn from some of its Continental neighbours. ‘There is much the UK could learn from the German rented residential market, but one must be careful and not assume that we can simply transplant the German model into the UK,’ said Peter Brock, co-managing director of Grainger Deutschland.
‘The nature of renting in Germany is both a reflection and a cause of the relatively stable house prices the country has seen over past decades as well as the deep cultural acceptance toward renting, as opposed to the British preoccupation with home ownership and house price inflation. Nonetheless, there are features of the German rental market such as longer term tenancies and a culture of professional management which help explain why it is such a successful investment asset class,’ he explained.
According to Michela Hancock, development manager at Bozzuto, there is a massive opportunity in the UK private rented sector to move towards a large scale, efficient model. He said this could include professional management and maintenance on site and customer service that responds to the renters needs. ‘Aspects of the customer service model already exist within the UK through the hotel, student accommodation and commercial asset classes,’ he pointed out.
James Pargeter, head of residential projects at Deloitte Real Estate, said that the private rented sector has made enormous strides over the last year in bringing the new purpose built private rented sector to reality. ‘This is a trend which will become ever more crucial into the future in addressing the housing supply crisis we face in the UK,’ he added.