With house building at a post war low despite increased demand, and figures from the Office of National Statistics showing UK GDP held back by a weak construction industry, the BPF believes the recommendations in the Montague Review could unleash unprecedented investment in house building from pension funds, insurance companies and REITs.
The Review, led by Sir Adrian Montague, examined the barriers to institutional investment in private rented homes and concluded that while there is significant potential, hurdles remain.
Ian Fletcher, director of policy at the BPF advised the review as part of a nine-strong expert industry panel.
The recommendations include:
- Local Authorities using existing flexibilities in the planning system to enable developments of privately rented homes, and Government providing guidance on this;
- Using planning conditions to ensure homes remain in the rental sector for a fixed period;
- Local authorities considering waiving affordable housing requirements in relation to schemes for private rent, where they are held for long-term rental;
- New measures to get public sector land made available for housing development.
- A kite mark to provide local authorities with peace of mind that such developments will be managed well.
Liz Peace, chief executive of the British Property Federation, said: "If we are to make headway in housing the nation and boost growth we must look at other ways of getting homes built.
"Encouraging institutions into building homes for rent has for some time been seen as the holy grail in enabling a long term private rented sector which is designed and built-to-let and offers renters something a bit different in the marketplace. The recommendations in the Montague Review will help address the barriers cited by the institutions and provide an inclusive model, which housing associations, home builders, property managers and construction firms can all participate in.
"Today is not the end of the journey, however, but the start of one. Myths about local authorities being forced to do this or that are just myths. Local councils and the communities they represent are in the box seat on this issue. If they want more housing to support their sons and daughters and grandchildren then an institutional private rented sector is an option they should consider. Some councils are tremendously supportive, but we need more to consider this option and to think about the differences between this and the traditional house building model, and perhaps get on board as partners. The Review is offering councils help for those that want and need it, and seeking to provide peace of mind through clearer guidance on how such developments can be treated for planning purposes, and on how they are designed and managed."