Building the new private rented sector: issues and prospects (England)
Analysis of Government policy, and its impact, to increase the supply of privately rented properties in England, as well as analysis of policy proposals from those within the sector, both from large-scale institutional investors and from small-scale individual landlords.
This briefing paper sets out measures taken by the Government, and policy proposals from those within the private rented sector, to increase the supply of privately rented properties in England.
Since 2011 private rental has been the second largest housing tenure in England behind owner-occupation, overtaking social housing. In the context of this growth over the last 20 years, and in the context of a national shortage of housing stock, successive Governments have increasingly looked to the private rented sector (PRS) to play a greater role in providing more new build housing.
Increasing institutional investmentThe 2010 Coalition Government emphasised the importance of increasing institutional investment into the PRS to fund large-scale, professionally managed developments. In August 2012 the Montague review, Review of the barriers to institutional investment in private rented homes, was published. The Government accepted a number of its recommendations, which were announced in its Housing Stimulus Package in September 2012. These included a £200 million Build to Rent fund (later increased to £1 billion), a £3.5 billion PRS housing guarantee and the establishment of a PRS taskforce to attract investment and share information on best practice.
Institutional PRS investors have called for additional measures to increase the attractiveness of investing in the sector. These range from reducing the requirements to provide affordable housing requirements in planning obligations, improving access to and affordability of land and a stable regulatory framework within which to operate.
The 2015 Conservative Government has rolled the Build to Rent fund up into a larger, non-PRS specific Home Building Fund. In its 2017 house white paper, the Government proposed a number of planning changes to increase the viability of purpose built rental developments (build-to-rent).
Buy-to-let landlordsDespite the 2010 Government’s interest in increasing institutional investment, the majority of PRS properties in England are currently built, acquired and managed by individual, buy-to-let landlords. This briefing also sets out the Government’s response to policy proposals from smaller landlords to help them boost the national supply of private rented housing, such as reform of Capital Gains Tax and Value Added Tax.
Social landlordsHousing associations and local authorities have also increasingly been looking to the private rented sector as a means of tackling local housing shortages and cross-subsidising their budgets, following reductions in central Government grant funding. This briefing also provides information on approaches that social landlords are taking to enter the private rented sector market.