London’s rental market is broken – but one solution is hiding in plain sight
London rents are sky-high and supply is falling further as buy-to-let properties disappear from the market. Rick de Blaby reckons there’s a ready-made solution
THE stalling economy and lack of growth in the UK is at the top of the agenda right now, and rightly so. With the International Monetary Fund (IMF) forecasting the UK’s growth to remain weak at 0.4 per cent and further monetary tightening on the cards, clear action needs to be taken.
But too often, the creation and improvement of the fundamental infrastructure needed to enable growth is not addressed.
It is an unavoidable fact that to drive growth we need the right people in the right places. It is also an unavoidable fact that there is simply not enough high quality housing in those urban centres to accommodate that talent.
We all know that there is a housing crisis and that more must be built and built fast.
The government’s decision to drop the target of 300,000 homes a year is a disappointing reflection of the direction of travel. A further drop in home building in the short term looks inevitable, compounding the problem. The government is right in that development must be a considered process, but there must be more urgency and commitment to that process from a central and local level.
After all, it is not just that these homes get built, but where and how they get built that matters.
The generation currently in their twenties and thirties want to be near to their workplaces and to shops, cultural centres and restaurants.
They need to be able to move around with ease, they want to be in a place that allows them to make connections and collaborate.
The rollercoaster of the pandemic years showed us that the appeal of city living has not dimmed, but it also shone a light on the need for human interaction and a sense of togetherness. These factors have a major impact on the life chances and well-being of the young talent that collectively creates the engine room of the UK’s future growth.
London rental market helping nobody
The traditional private buy-to-let rental sector that serves this group is in disarray.
In many instances, renters have had to tolerate unscrupulous landlords and poor quality housing. But even the responsible private landlords are now exiting the sector in droves as policy changes have reduced the incentives to invest.
The recently introduced Renters Reform Bill is well intentioned and might drive better transparency and fairness in some areas. But we need to be honest and face the fact that without significant further new investment that can deliver new stock at scale, we’re going to be dealing with this crisis for quite some time and it is going to be those crucial younger generations that will suffer most.
The fast emerging, professional build-to-rent sector has long been knocking on the door to provide a solution to the problem.
Whilst at present only a relatively small proportion of the overall housing sector, Build-to-rent has ambitious plans for growth with schemes in development across the UK, built on brownfield sites, located in and around key cities.
In fact, 49 per cent of all local authorities now have either completed Build-to-rent homes or units in the pipeline. Backed by sophisticated, long term and responsible institutional capital, the potential for these properties to make a meaningful impact on housing delivery is huge. It challenges the status quo which has dominated the market for so long.
Without a considerable increase in home provision, the UK is set to become less mobile, less productive and ultimately less happy.
People want high quality homes, in safe and vibrant neighborhoods where the opportunity to be part of a community is central. Its entire model is founded on providing residents with a great experience, existing interdependently with business, retail, leisure and the local civic family.