‘Build for private rental on public land’
The Making Rent Viable report calls on ministers to create formal planning guidance to make it cheaper for developers to build homes solely for rent, which at the moment is more expensive than selling off properties as soon as they are built.
The report is published by corporate law firm Addleshaw Goddard, who earlier this month were appointed to a position on the core legal panel of Nationwide Building Society.
The report saysthe private rental sector has doubled in size in the last decade and says councils can harness long-term rental income by building such homes on public land.
A formal covenant of rental provision for a minimum number of years should be created to guarantee a long-term supply of rental homes while helping to assuage the fears of councils that developers could quickly sell-off properties.
One of the most substantial impediments to the nationwide pursuit of such a policy would, the report accepts, be an expected ‘backlash’ against the deployment of public resources for the sole benefit of that comparative few with the financial capability to take full advantage of the opportunity,
The report argues for private rental quotas in each local authority area to “reduce the potential political backlash against building for private rent”.
Ian Fletcher, director of real estate policy at the British Property Foundation, said: “Acceptance of the role that the private rental sector has in providing the next generation of housing has never been higher, with many local councils conducting groundbreaking deals in the last 12 months.
“But this momentum must be maintained to make sure the potential of the sector is realised, so that more renters, particularly in the South East, get the homes they need.”
Marnix Elsenaar is a planning partner at Addleshaw Goddard.
He said: “Planning guidelines need to be stronger and financial viability models need to reflect the fact that building for long-term rent is not the same as traditional housebuilding.
olicymakers need to appreciate that if they get this right they could unlock a model that provides thousands of new homes with real long-term community benefits.”