London must build to rent for its growing city of renters

Turley has teamed up with one of London’s leading business organisations London First and London Councils, the membership organisation representing the 32 boroughs and the City of London, to increase awareness of the capital’s growing build to rent sector.

Produced by Turley, the report highlights the potential for build to rent developments – i.e. purpose built, professionally-managed, new homes funded by long-term, secure investment – to play a significant role in housing London’s growing population.

Build to rent report front cover

Aimed at London councillors and officers who will be responsible for key decisions on how the capital increases its housing supply, the report explains how build to rent can provide an additional source of high-quality supply, to complement that provided by mainstream housebuilders.

In turn, this will assist with housing the growing number of renters in the capital, some of whom choose to rent for lifestyle reasons, but many of whom are forced to rent because they cannot afford to buy and are not eligible for affordable housing.

The report highlights that in addition to meeting a specific housing need, build to rent brings significant benefits including:

  • delivering large-scale developments at pace
  • driving regeneration
  • stability and certainty for tenants
  • professional management
  • long-term investment and stewardship in an area
  • social integration and flexibility
  • potentially a long-term income stream for local authorities with scope for joint ventures and shared rental income.

Recent research from the British Property Federation revealed that in London, just over 10,000 purpose-built build to rent homes have been completed in recent years, close to 9,500 homes are under construction and just over 27,500 homes have planning permission.

This growth is being supported by changes to public policy made by both central and London Government. Turley’s analysis also identifies how the planning system and housing policy in London are now starting to reflect the fact that build to rent is different from for-sale and affordable housing, and requires a bespoke set of policies and a supportive decision-making environment to support its growth.

The report also provides a borough-by-borough breakdown of current and emerging planning policies, which reveals specifically where in the capital build to rent has been identified for support.

Commenting on the report, Sarah Bevan, Director at Turley and one of the report’s authors, said:

“The GLA has acknowledged the planning and housing benefits of build to rent development and is looking to build on the momentum of this growing sector through the Mayor’s recently published Affordable Housing and Viability SPG. We urge the London boroughs to continue this impetus through the adoption of bespoke local plan policies that support the sector and encourage long-term investment to help widen housing choice and improve affordability within their boroughs.”

Jonathan Seager, executive director of housing policy at London First, said:

“London is becoming a city of renters so we must give Londoners a better choice of rented accommodation. Build to rent can deliver this by providing stable, long-term investment and high-quality new homes, designed specifically for the rental market. There has already been significant growth in the sector but, with the full support of local authorities, build to rent can dramatically boost housebuilding in London.”

Sir Steve Bullock, London Councils’ executive member for housing, said:

“London boroughs recognise that enabling the development of build to rent housing is vital to solving the London housing crisis – we need at least 50,000 new homes per year in order to meet London’s crisis-level housing need.

“This joint research highlights the opportunities and challenges associated with delivering build to rent developments in London and complements the GLA’s recent affordable housing and viability Supplementary Planning Guidance, which sets out policy that aims to increase the delivery of build to rent housing in the capital.

“As the number of Londoners living in private rented accommodation is increasing, delivering high quality housing built specifically for renting at scale and pace will meet the growing demand for this type of accommodation as well as improving standards in the private rented sector.”

Click here to download your copy of our full report Everything you need to know about build to rent in London.

7 September 2017