‘Planning to make a better rental market’ Helen Streeton shares her thoughts with Landlord Today
Following its General Election victory, the Labour Government sprang into action to tackle the housing crisis, tabling a Planning and Infrastructure Bill and Renters’ Rights Bill in the King’s Speech within weeks of taking office.
It also announced an eight-week consultation on a revised NPPF, reiterated its manifesto commitment to delivering 370,000 homes a year in this parliament, and addressed mandatory housing targets for councils and the ability to build homes on the ‘greybelt’ (greenbelt of poor quality and underutilised land).
It’s clear that Britain’s 12 million renters won’t be forgotten under a Labour Government, but will Labour policies create an appealing landscape for investors?
The UK Build to Rent sector is one of the fastest-growing sectors in the housing market, with the delivery of units increasing at an average rate of 54% per annum between 2015 and 2021, according to JLL. Despite this, there is disparity up and down the country regarding planning authorities’ knowledge and understanding of BTR as a product and how financial viability modelling works. This is different to housing delivered for sale.
The number of households renting is rising, 35% of households now rent, compared with 35% who own outright (most of whom belong to the over 65 age category) and 30% who own with a mortgage. Renting is no longer the reserve of the young, with the number of households in England where the main tenant is between 45 and 64, sitting at around 70% of the rental market.
The Renters’ Rights Bill seeks to ensure that renters have long term secure and high-quality housing. BTR developers and operators welcome new laws which will provide these protections – the vast majority of landlords want their tenants to be with them long-term and already provide the flexibility to move between properties as needs change.
At the same time, any new legislation needs to ensure a balance between those protections and investor appetite – it would backfire if the upshot is that landlords, especially smaller PRS landlords, withdraw from the market, further choking off supply and putting upward pressure on rents.
Research from the British Property Federation earlier this year showed that 40% of BTR sites take at least a year to achieve planning consent and there are concerns within the industry about the pace at which the new Building Safety Regulator can review buildings within the Building Safety Act Gateways.
Changes to the planning system are a key priority for the government, with Labour hoping it can unlock schemes and investment. Great certainty in planning timelines and a clear framework should enable schemes to progress more quickly. But with both the planning system and building safety, questions remain over resource – is there enough focus on ensuring we have professionals with the necessary skills within the sector?
Labour’s ‘getting Britain building’ rhetoric will only succeed if there are fundamental changes to how Britain’s planning system operates in tandem with a concerted effort to increase resource at a local and national level.
The industry and investors will be eagerly awaiting next steps on the Renter’s Rights Bill tabled by the Government, which is now at the committee stage. Early signs are promising for individual renters, with increases to rights and protections including banning Section 21 ‘no-fault’ evictions for new and existing tenancies. However, the precise and final details of the Bill will be critical in determining the impact on investor appetite.
Labour needs to work closely with industry stakeholders to develop a rental framework that balances the interests of landlords, tenants, and local communities, ensuring fair and transparent practices.
This article was published in Landlord Today on 04 November 2024.
