Is build-to-let the answer to the housing shortage?
The Government wants to see more housing built specifically for renters.
Britain’s housing shortage would be fixed by encouraging investors to fund the building of properties specifically for rent.
That’s the suggestion from Sir Adrian Montague in a report looking at the rental market, commissioned by the Government, which was published this week.
And his big idea focused on building properties tailored to the rental market. Montague came up with a number of recommendations to help speed up the building of private-rented homes.
These include:
- Allow councils to ignore requirement to build specific number of affordable properties on new developments. Currently developers claim that the affordable housing quotas make some developments unfeasible.
- Set up a task force to encourage and support build-to-let investment from the private sector.
- The Government should provide ‘targeted incentives’ to encourage build-to-let models, such as sharing development risk.
- The Government should allocate some of the public sector land and buildings which is currently earmarked for housebuilding instead to build-to-let developments.
- Sites where there is good demand for rental housing should be identified and made available to developers on the condition that a percentage of the homes will be let.
You can read the full report, which has already won the support of Housing Minister Grant Shapps, here.
What do you think? Should affordable homes quotas be ditched so that we can build homes specifically for the rental market?
More on property:
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Manchester Building Society launches 25-year fixed rate mortgage
Scotland launches new matchmaker service for empty homes
Should councils sell off their best homes to build cheaper ones?
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So now, not only do the rich get to buy up all the housing to rent out to the poor, they now get to build new property to rent out to the poor. We are going back to Victorian times in this country, where only the landed gentry own property.
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A goodly number of public sector houses could be made available with a rethink of eligibility and tenancy conditions. Publicly owned housing (that is housing with subsidised construction and housing with subsidised rent) is designed for the poorer elements of society but this is patently not working well. I am personally aware of many subsidised properties let to families who have a good income but are not prepared to pay private sector rents which would cut into their lifestyle. Owning modern cars, expensive smart phones, Sky premium TV, etc is indicative of an affluent lifestyle that is effectively indirectly paid for by a subsidised rent. The criteria for access to public subsidised "affordable" housing needs considerably tightening and the tenancy term should be restricted to periods of 6 years, during which the tenants should be looking for private unsubsidised accommodation without the right to automatically renew the tenancy. At the end of the tenancy period the tenant should vacate the premises, move into B&B and rejoin the waiting list while the next on the list gets a 6 year tenancy. This would also enable under occupied larger publicly owned houses to be better utilised and would remove the "subsidised council house for life" syndrome. The present public housing system whereby very costly publicly funded Housing Associations and Councils are duplicating the provision of "affordable" housing is economically inefficient and should be amalgamated "locally" under Councils. Private developers should be given financial support on a commercial basis to build houses for rent and no "affordable housing" quotas made a condition of the development. "Affordable housing" construction should be funded by national and local authorities as a commercial type investment whereby the outlay and the running cost is recouped through rent.
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yes but if you buy 2 let cars the world's your oyster!
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10 September 2012