Government outlines plans to boost private rented homes

Concerns over plans to encourage investment in build-to-let

Neil McCall, Group Operations Director, for Affinity Sutton, raised concerns on BBC Breakfast that proposals to waive affordable housing requirements on new private rented developments could reduce the number of affordable homes.

BBC news report

What the Government's Montague Report says:

• That councils use flexibilities in the planning system to plan for and enable developments of privately rented homes where they can meet local need.  This could include waiving affordable housing requirements on new developments of homes specifically for private rent, or reviewing stalled sites to see whether some of the new homes planned could be made available to rent rather than sell;
• That a task force be set up to encourage and support build-to-let investment from the private sector, and to develop voluntary standards that future landlords would meet and tenants could expect;
• That the Government look to provide a number of targeted incentives to encourage the development of Build-to-Let business models, which could include sharing development risk in the short-term to get spades in the ground and building started;
• That the Government allocate some of the redundant, formerly used public sector land and buildings being released for housebuilding to build-to-let development, and publish data on how this is done; and
• That the Government work with councils and the Greater London Authority to identify a number of sites where there is good demand for rental housing and make them available to developers on the grounds that a proportion of the homes built be let out to tenants

Affinity Sutton's response:

• The scale of need for new housing is demonstrated by the government’s own assessments – which estimates a backlog of outstanding need of around 1.9 million (or over 8% of) households.   Affinity Sutton is one of the largest developers of affordable homes in the country – last year we signed a contract with the Government’s Homes and Communities Agency for £65m to build 3,000 new affordable homes by 2015.
• We haven’t seen the full report yet but we support the case for more privately rented homes and welcome any proposals that seek to kickstart house building and increase the supply of new homes being built both to buy and to rent. 
• We also fully support proposals to release public land for housebuilding – and would like to see this extended to building for social & affordable rents - and plans to improve standards for people living in private rented homes especially around longer term more secure tenancies – measures which reflect some of the things that housing associations have been providing for years.
•  But we need to ensure that these proposals genuinely boost the total number of homes built and do not just use existing capacity in a different way.
• We don’t believe that commitments to provide homes for market rent rather than for sale should exempt developers from requirements to deliver affordable homes.
• Failure to provide homes that people can afford and moving more people into the private rented sector rather than providing more affordable homes could punish people in low to medium paid work, as well as vulnerable families,  and push up the housing benefit bill.  93% of new housing benefit claims between Jan 2010 and Dec 2011 were from in-work households and most of the growth was from tenants living in the private rented sector.