The property industry will today hear how the private rented sector will be crucial in the UK’s recovery from the current housing crisis, and how momentum might be best sustained now that this fledgling industry is gaining some traction, at the British Property Federation’s annual Residential Conference, hosted by Deloitte Real Estate.
Delegates will hear Shadow Planning Minister Roberta Blackman-Woods explain Labour’s commitment to supporting a well-managed and sustainable large scale private rented sector as part of its strategy for overcoming the housing crisis. The theme of the conference is ‘winning hearts and minds’, looking at how investors, local government and customers all need to be attracted to this new form of tenure if it is to be successful in the UK.
Research commission by the BPF and carried out by Molior London will reveal that progression in the ‘build to rent’ sector over the past year has been significant, with 8% of all new build property in the capital built for the rental market, which the BPF sees as extremely encouraging. Speakers from JP Morgan, British Land and Barclays Corporate Banking will discuss how to attract institutional investment to the sector and will turn the spotlight on how it performs as an asset class. Grainger Deuchland’s Managing Director Peter Brock will explain which elements of the European property market will translate into the UK’s.
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 £1bn Build-to-Rent Fund, and support through revised planning guidance. London’s Mayor has also shown confidence in the sector, making build-to-rent a 5k contributor towards his annual housing target of 42k units. Maintaining interest in the sector and ensuring that it does not become a tenure that is only available in London is crucial to the model’s sustainability, and local authorities play a crucial part in ensuring its delivery across the UK.
Winning the hearts and minds of customers will also be discussed. Large scale PRS operators such as Get Living London, Essential Living and FizzyLiving have already raised the bar and have introduced incentives such as long term tenancies, no fees and professional management, which lead to tenants staying and brand loyalty. Michela Hancock, Development Manager at Bozzuto, a well-established rental brand within the much more mature USA rental market, will cast a glimpse into the future, where hotel style service standards are the norm.
Speaking ahead of her keynote speech, Roberta Blackman Woods MP, Labour’s Shadow Planning Minister, said:
“With the country in the midst of the biggest housing crisis in a generation, we desperately need to build more homes. Labour is determined to tackle this crisis and we have committed to increasing housebuilding to 200,000 homes a year by 2020.”
“Crucial to building more homes is recognising that we need to build more homes of all tenures. The private rented sector already plays an important role in meeting the UK’s housing needs but it can do much more.
“For the private rented sector to play an increasingly important role we need to ensure that the conditions are right to attract the long-term investment that the sector needs. We also need to ensure that the sector is one of choice and ready to meet the needs of those living in it now and in the future, who do not want or currently cannot buy their own home.
“That’s why Labour has set out plans to reform the private rented sector. If the private rented sector is to be one of choice it must meet the needs of those living in it not least the 1.3 million families with children.”
Paul Tennant, Chief Executive, Orbit Group, added:
“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.”
Peter Brock, Co-Managing Director of Grainger Deutschland, said:
“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. 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.”
Michela Hancock, Development Manager, Bozzuto, added:
“There is a massive opportunity in the UK private rented sector to move towards a large scale, efficient model that includes professional management and maintenance on site, customer service that responds to the renters needs and creates a community within the scheme. Aspects of the customer service model already exist within the UK through the hotel, student accommodation and commercial asset classes.”
Dominic Martin, PRS Taskforce, DCLG, said:
“Examples abound of new PRS development schemes in London but will it work anywhere else in the country? The case for, or viability of PRS, is a question of both profitability and land value as well as the investment case, where is the demand.”