TSI
Call for Build to Rent in the UK to be expanded and include more affordable homes
Build to Rent development in London is over double that in the rest of the UK, with a new manifesto calling for more affordable homes to be included in such schemes. There are over 14,276 units in planning, completed or under construction in London compared to 7,112 in the rest of the country, according to the new data from the British Property Federation. They also show that there are at least 3,404 completed units in London, compared to 240 in the rest of the UK. The organisation has published a new manifesto for the Build to Rent sector, in which it urges government to follow the lead of the Greater London Authority (GLA), and change national planning policy to stress that the appropriate affordable housing on new Build to Rent developments should be discounted market rent. It says that this helps development viability, but also allows the investor to manage the ‘affordable’ and ‘market rented’ elements as one, in a tenure blind manner. The BPF has long championed the role that Build to Rent has to play in expanding housing delivery, attracting long term investment that has the potential to significantly boost housing supply. Recent research has shown that Build to Rent can deliver homes at 2.5 times the speed of developments for sale, and that there is £10 billion of firm commitments and as much as £30 billion that the sector has ready to invest this Parliament. The £10 billion of investment identified for Build to Rent would create around £28 billion of wider economic benefit. ‘It has felt for a long time that Build to Rent has been on the cusp of becoming a sector in its own right. Today, we are proud to show that the sector has really taken off, and it is great to see how many fantastic projects are either underway or completed, and that residents have quality rented homes,’ said Melanie Leech, chief executive of the British Property Federation. ‘There is more that can be done to encourage the sector to grow, however. The GLA has paved the way for Build to Rent, introducing both ambitious targets and supplementary planning guidance, and the map launched today shows that this has really paid off,’ she explained. ‘Government has everything to gain from encouraging this sector, which will attract significant institutional investment into UK housing supply, deliver new homes quickly, and drive up standards in the private rented sector, and we hope to see it continue to support it,’ she added. Andrew Stanford, residential fund manager at LaSalle Investment Management and chairman of the BPF’s Build to Rent Committee said that the momentum behind Build to Rent continues and it is moving firmly beyond theory and into reality. ‘With continued support from both national and local government this progress can continue. The growing number of long-term institutional investors in the sector will then find a suitable home for their capital, ensuring that housing supply and tenant choice… Continue reading
UK Property Ombudsman calls for new Act to reflect developments in the sector
The UK’s Property Ombudsman has called for the introduction of a Property Agents Act as the current situation is not open or consistent enough. The call from Christopher Hammer, who is coming to the end of his nine year term as Ombudsman, believe the latest data shows that provisions do not go far enough in terms of disclosure for agents, tenants and landlords. The figures show that more than half of the 9,141 enquiries received related to lettings disputes, nearly double that of sales. Hammer says this reinforces the importance of legislation introduced a year ago, making it a legal requirements for all letting agents in England to register with an approved redress scheme. ‘A Property Agents Act would update the Estate Agents Act 1979 to reflect developments in the sales market and most relevantly now, bring lettings into a precise framework where all agent activity is covered by one piece of legislation,’ said Hammer. He has suggested licensing of agents, standardised tenancy agreements and compulsory client money protection could all be areas included in such an Act. The figures, published in The Property Ombudsman's 2015 Interim Report, reveal that membership levels have grown by 16% in the first half of the year. A total of 1,587 complaints, up 34% on the previous year, were resolved covering sales, lettings and other jurisdictions between 01 January and 30 June 2015. Some 3,641 additional sales and letting agents registered with TPO and a total of 34,944 agents registered with TPO across all jurisdictions, a 16% increase on the same period last year. Overall some 9,141 consumers contacted TPO regarding a property dispute, an 8% increase on the same period last year. More than half, 58%, of all the enquiries received were regarding lettings disputes with 5,303 enquiries logged, nearly double that of sales enquiries which represented 30%. Complaints grew by 34% overall with 1,587 cases reviewed, of which 934 were against letting agents, up 30%, and 596 were against sales agents, up 39%. Continue reading
London residential rental market strong, new reports suggest
The London rental market has bounced back to see rental values rise by more than 4% across most of central and east London with healthy gains seen across most of the rest of the city. The research by analysts at Benham & Reeves Residential Lettings cite the crippling effect of the new stamp duty rates on the sales market for the strong rental market as tenants eschew home ownership in favour of long term tenancies. The prime central London market saw strong gains last quarter after several quarters of stagnation, and continued to see strong growth this quarter, the data also shows. Many of the tenants are overseas professionals who are opting to rent long term as the cost of renting often represents a saving compared to purchasing a home in high value areas thanks to the 12% top rate of stamp duty. The rental market in east London is also very strong but for different reasons. The tenant demographic is typically younger and more likely to be British. However, many of these tenants are deliberately choosing to rent rather than own a property as a lifestyle choice, the report suggests. It explains that many of the millennial generation do not view home ownership as a goal and recognise that they can often afford to rent a much better property than they can afford to buy. Millennials are also a more mobile workforce who change jobs more frequently than previous generations. North London was one of the few areas to see rental values fall. A number of new developments in north London have seen the property supply increase. Locations on the Northern Underground Line have also fallen as the Central Line interchange at Tottenham Court Road has been suspended for several months while the station is rebuilt for Crossrail. ‘From an investors' perspective, it is very interesting to observe demographic changes. One of the reasons the rental market tends to remain so strong in areas such as east London is because these areas attract Millennials who are content to rent long term,’ said Marc von Grundherr, lettings director at Benham & Reeves Residential Lettings. ‘They're simply not willing to scrimp and save for years to afford a deposit but prefer to live for the moment. This concept even extends to where they choose to rent as they'd much rather live somewhere central close to good bars and restaurants than commute in from more affordable areas. For as long as East London remains hip and trendy, it will continue to attract good quality tenants,’ he added. Separate research from JLL also suggests that the lettings market in London is strong. According to Tom Middleditch, associate director of the firm’s Kensington office said September was particularly strong and added that landlords should still see this as the ideal month for their properties to be coming available. ‘Taking the months of August and September, we seen a 49% increase in tenancies starting than in the… Continue reading
