Why so little progress helping ‘rentysomethings’?

The link is that so many trees have gone into their publication we are missing entire forests. But are they actually making a difference?

These strategies are well-intentioned and cover ways of speeding up planning (eg Housing Zones, permitted development rights), provision of funds (eg Build to Rent, Help to Buy) and accelerating the release of public land (eg Build Now Pay Later).

PRS was a big part of the general initiative, initially with the publication of the Montague Report, which called for reforms in planning rules including flexibility over affordable housing requirements when developing schemes for new private rented homes.

But while the goodwill may be there in abundance, we are still not making real progress towards rectifying the delivery deficit. Public launch weekends of new developments are celebrated with long queues and reports of ‘total sell-out’. This suggests hungry buyers and happy sellers, but no evidence of any levelling of the supply-demand imbalance. And who are the buyers?

Foreign investment in the purchase of new property is generally seen as welcome. Apart from attracting foreign currency, it drives employment and the economy. However, it’s impossible to know how much of the government’s annual new homes target of 250,000 properties is earmarked for overseas investors (if any). More to the point, despite the range of initiatives, policies and investment commitments, we are making no short-term progress in providing rental property for the huge numbers of ‘rentysomethings’ for whom home ownership is out of reach.

Take PRS as an example. Announcements from Hermes, Greystar and Crescent Heights among others suggest they are actively looking to invest in UK PRS. This is alongside currently active players such as Fizzy, Essential Living, Get Living London, Be:Here and Grainger, all of which have the funding and experience to deliver substantial long-term rental assets quickly.

It’s worth reminding ourselves what we are trying to achieve. In simple terms, it involves the transition of redundant and non-performing sites into modern sustainable affordable (small ‘a’) homes to address the housing shortage.

The Strategic Housing Land Availability Assessment and the mayor of London’s Housing Supplementary Planning Guidance between them identify suitable and available sites for development, while providing guidance to the planners. But there’s no executive instruction to kick it off. It’s a bit like an admiral planning a campaign, getting it resourced and briefing the marines, but then realising he doesn’t have the contact details of the chap in charge of the anchor, so he can’t tell him to wind it in. The result is the ship never leaves port.

Maybe what we need to get this ship moving is to enable the most obtainable sites to be fast- tracked. Such sites would become the subject of a joint venture between the owning authority, a funder and a PRS landlord. The land would be put in at par, subject to the other partners delivering the development. Following practical completion, the scheme is managed as a standard PRS asset, having been delivered without the need for grant aid or financial guarantee from the government. A proportion of the apartments might be operated at intermediate or submarket rents, but without the encumbrance of tenant nominations that would preclude the majority of institutional investors.

The result would be a rapid rise in the supply of relevant housing with no call on public funds, and the payment of regular long-term income to local authorities by way of their share of the monthly rent surplus. There is the added bonus for the local authority that it now owns a share of a valuable and tradeable asset. Of course, other solutions involve including housebuilders and commercial developers in the joint venture where a more mixed-use outcome is preferable.

What we need is for the government to stop giving guidance and start giving instructions.

Harry Downes is managing director of Fizzy Living