Build to Rent in the South West
In the Housing white paper, we saw for the first time the government’s acknowledgement of the importance of the Private Rented Sector and its vital role in delivering housing to a growing number of the UK’s population. Recently property specialists PRSim and law firm Trowers & Hamlins invited property professionals in the South West to discuss the opportunities for Build to Rent and the broader Private Rented Sector in the area.
Build to Rent is an increasingly popular route to housing delivery. It focuses on the provision of new high quality homes for rent, which will be professionally managed to a high standard and are likely to be institutionally owned in the long term. This form of housing has been popular in mainland Europe and the States for more than a decade, and the UK is now looking to join in. There are already over 100,000 Build to Rent homes in various stages of development around the country.
The white paper recognised the need for a variety and complementary approaches to the housing crisis. Under the heading ‘diversifying the market’ the government want to encourage more institutional investors into housing, specifically the Build to Rent sector. This was demonstrated with three key proposals: (1) a change to the National Planning Policy Framework encouraging local authorities to plan for Build to Rent where there is a need; (2) to make it easier for Build to Rent developers to offer affordable homes for rent and; (3) to ensure Build to Rent developments offer family-friendly tenancies of three years or more to those that want them.
For two years running PRSim has carried out the largest survey of residents across the UK, via which they have been able to extract South West specific information, compared with the rest of the country. This has shown that the South West has a large population of students and graduates who require housing as they enter the workplace; Build to Rent can accommodate their needs with purpose built apartments that deliver similar amenities to professional student accommodation. It is also adaptable to co-living which enables the rents to be kept at an affordable level whilst delivering quality, well managed accommodation.
It is vital for the South West to entice and retain big businesses in order to preserve skilled graduate labour within the region, this in turn is made easier if the skilled labour is already readily available within the local area, herein lies the double edge sword.
Alongside students, the South West is an ideal location for working families many of which are unable to buy property and are looking to institutional investors to deliver family homes at affordable rents. Again, the institutional investor delivers high quality well managed family homes and, unlike smaller landlords, can provide much longer tenancies which are essential if you have children at school and work commitments that require you to set down roots for many years without the concern of securing accommodation on an annual basis.
The popularity of the South West as a region with those at or beyond retirement age is well known. Looking to the future we expect that the economic drives in the wider economy will result in more people in that age group looking to sell their original family home, but then look to rent going forward rather than buy. High quality Build to Rent homes are likely to be attractive to many in that group, and are another reason why demand for such homes in the South West is expected to rise.
A growing number of institutional investors are looking at how to deliver the necessary schemes required in the region and working alongside architects and planners to build homes that people want to live in. Build to Rent developments also bring new and exciting amenities that make people's lives more efficient and stimulating. There is much greater recognition of the importance of placemaking, and that a home is a place you want to hurry back to at the end of the day and be surrounded by family and friendly neighbours.
Build to Rent has been shown to be capable of fast delivery, getting people into new homes faster than traditional build to sell. However, in order to bring such advantages to the South West, developers and investors will need to be confident of the support of local government in the area, and in particular from planning teams. With this we anticipate that Build to Rent will have a significant role to play in addressing the specific housing issues in the South West.