Helen Streeton featured in PERE’s ‘on the minds of the experts’

• 3 June 2024
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The residential sector remains attractive, with strong supply and demand dynamics across markets, but it is not without its challenges. PERE looks to the experts to answer questions on the residential sector and Helen Streeton, Partner and head of our BTR sector, shares her thoughts as one of the industry leaders.

Question: What is the current appetite for residential property investing and how has that changed in recent years?

Helen shares “Investments into BTR continues despite economic headwinds as demand outstrips supply. In 2023, the BTR market saw £4.5 billion invested. Housebuilders continue to face challenging conditions, meaning that investment is greatly needed to tackle the UK’s housing shortage.”

Read the full Q&A on PERE’s website here.

Amy France speaks to CoStar on how investors are finally waking up to the potential of care homes

• 29 May 2024
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Published as one of CoStar’s expert opinions, Amy France discussed the big supply-demand imbalance the private sector can plug and how investors are finally seeing the potential in care homes.

The gaping supply-demand imbalance for care homes has now reached acute levels, yet delivery has been slow and investors have been reticent in making serious moves into the asset class. However, numerous factors and a succession of significant deals indicate that in the first quarter 2024, sector activity is picking up and looks set for a period of sustained growth.

According to the Office for National Statistics, the proportion of the population over 85 years old in the UK is forecast to more than double over the next three decades, from 2.5% in 2021 to 5.2% in 2051. Research from Knight Frank has found that by 2035 there will be a shortfall of 58,000 beds across the later living sector and that by 2050 an additional 350,000 older people will potentially need a care bed, which indicates an even greater acceleration in the demand for more beds.

Read the full article published on 29 May 2024 on CoStar’s website here.

Is the UK housing market facing the prospect of rent controls? Louise Marin-Bataller shares her thoughts with IPE Real Assets

• 22 May 2024
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Louise Marin-Bataller, Senior Associate within our Commercial Real Estate team, has shared her industry reactions to The Renters Reform Bill with IPE Real Assets in a feature named ‘Is the UK housing market facing the prospect of rent controls?’

Louise questions “how long could a reform of the court system take? Will it ever happen and will section 21 ever go?” It seems unlikely during the current government’s lifetime.

There are many other aspects to the Reform Bill, however, which might still have implications if not further amended. Worries around the private student housing market appear to have abated, which is lucky as some of the original proposal regarding changes to notice were quite simply “a minefield” in Marin-Bataller’s opinion.

She remains worried about proposals to stop landlords accepting more than one month’s rent in advance. This could cause problems for foreign renters or those with bad credit histories, who “would normally get around the credit referencing issue by paying six to 12 months’ rent in advance,” Marin-Bataller says. “What will happen to this group of people, particularly when some have suggested that guarantors should also no longer be allowed?”

Tenants could clearly benefit from landlords being unable to service notice to terminate a lease until six months into the lease term. But unless proposed amendments are accepted, “landlords could be faced with notices served on day one by tenants resulting in short-term lets of two months”. Marin-Bataller wonders: “Will this ultimately lead to landlords leaving the PRS?”

Real the full article, alongside comments from other industry leaders from the BPF, Get Living and Nido, on IPE Real Assets’ website here.

Helen Streeton quoted in Inside Housing on the landmark ruling demanding building owners pay for cladding fixes

• 13 March 2024
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Partner and Head of BTR, Helen Streeton, has been quoted in the Inside Housing article entitled “What the landmark Get Living ruling means for housing associations and leaseholders”.

Late in January, a first-tier tribunal ordered the owners of London’s Olympic village to pay £18m to fix fire safety issues on five blocks of flats. The judgement was the first use of new remediation contribution order (RCO) powers under the Building Safety Act 2022. It was hailed as a victory by the leaseholders, who have been unable to sell their flats since defects were uncovered, and Triathlon Homes, the housing association that brought the action.

The first-tier tribunal has ruled that Stratford Village Development Partnership (SVDP), the developer of East Village, and Get Living, its parent company, must pay £18m towards making five of the 66 blocks safe.

Helen Streeton, Head of Build-to-Rent at law firm Fosters, says the decision bumps up against other government legislation to cover remediation work. Under the ruling, the owners must now reimburse the government’s Building Safety Fund (BSF), which is paying £24.5m of taxpayers’ money to cover both Get Living and Triathlon’s share of the works.

On the RCO, she says, “its interface with the BSF is a bit odd. They’re not particularly aligned”. The Building Safety Fund allows people with responsibility for remediating the defective cladding to apply for taxpayers’ money, but “overlayed on that”, the Building Safety Act says “we can require you to contribute”.

“Although I understand the concept of somebody apart from the taxpayer being responsible for funding the works, I think it’s a massive decision for developers and building owners,” she says, as it “provides uncertainty” over whether they or their shareholders will have to pay back into the fund.

Helen adds that further thought will now be required around due diligence and the decision may deter investment into the residential HRB sector.

The full article, published on 27 February 2024, can be read here behind a paywall.

Could census data be better used to determine housing supply? – Matthew Evans and Helen Streeton write for CoStar

• 29 August 2023
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Commercial Real Estate Partner and Head of Forsters’ Build to Rent group, Helen Streeton, and Planning Counsel, Matthew Evans, have written for CoStar on how the data is there to get new homes built, and why it is not currently being mined.

The pair write how the local plan-making process to deliver new homes was further complicated by Michael Gove’s announcement earlier in the year that the government is scrapping housebuilding targets.

Even before this decision, the delay in implementing planning reforms had been causing severe challenges to the delivery of these new homes.

Evans and Streeton explain that “although local authorities still need to update (or in some circumstances, create) local plans, many are still adopting a wait-and-see-approach while they wait for further clarity on legislative reform within the Levelling-up and Regeneration Bill and the government’s response to its recent consultation on the National Planning policy Framework.”

Resultantly, housing needs continue to go unmet and rental levels continue to rise. This is particularly pertinent for the rental market, with average prices nationwide rising 4.8% in the 12 months to April 2023, “the highest increase since the national data series began in 2016.”

Despite widespread focus on community opposition to new homes, and a strong anti-development rhetoric in mainstream media, Evans and Streeton say that the reality is very different.

There is a genuine appreciation for the need for new homes, but the underlying concern is around the demands an increased population would place on local infrastructure.

“Would top-down housing numbers solve the problem? Potentially, if they leaned on data that gives a true representation of housing need. Utilising census data could be a more effective way of identifying the tenure and size of homes needed, and in what locations.”

The pair add that even though the Build to Rent sector is projected to grow rapidly over the next decade or so, moving from 1.5% to 8% of the total rental market by 2032, there continues to be a lack of knowledge and expertise around its role in meeting housing need.

It is a similar case for the later living sector. There is an urgent need for sector growth but insufficient amounts of suitable housing. The pair suggest that creating a separate use class could be helpful in expediting planning applications, thus alleviating the strain on the sector.

Evans and Streeton conclude that: “The answer to meet housing need is not to scrap housing targets. It is to be smarter about how housing numbers are calculated and tap into the incredible wealth of data that already exists on our current and future population, in order to provide the right homes in the right places.”

This article was originally published by CoStar on 22 August 2023 and can be read here in full (behind their paywall).

The challenge faced by the Older People’s Housing Taskforce – Amy France writes for Property Week

• 11 July 2023
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Commercial Real Estate Partner and Head of Later Living, Amy France, has written for Property Week on how the Older People’s Housing Taskforce will fare in tackling one of the UK’s biggest challenges: How can suitable housing options be provided for later life?

France notes that “Housing has always been intrinsically linked to life chances, and this is no different in later life. Housing that provides the right kind of support and adequate care, if required, can help people live well for longer.”

France writes how a lack of suitable later living options has had a significant impact on the NHS, resulting in a bottleneck whereby patients who no longer need treatment cannot be discharged as they don’t have a home which is suitable to be discharged to. As a result, in January 2023 “more than 19 in 20 beds were occupied across adult general and acute hospital wards, and more than 14,000 of these beds were taken up by patients who no longer required hospital care.”

With the Taskforce’s recommendations due in 12 months, the key message will be around the delivery of new homes, with France asking: “How else will the taskforce meet one of its central aims – providing older people with access to the right homes in the right places?”

This will be a significant challenge when viewed against the government’s scrapping of mandatory housing targets and the prediction of net additional homes each year dropping to 140,000. France writes that local authorities must commit to ensuring a certain proportion of these homes are suitable for older people.

The government has also proposed an increase in planning fees, which has industry support provided that it does actually result in a swifter approval of planning applications. “At the current pace, though, applications and the homes they propose to deliver will take months to materialise, while our population continues to age and our NHS and care system continue to buckle under the pressure.”

France concludes by writing: “Older people don’t want to have to move miles away from their existing home so that they can access retirement communities or sheltered housing. In later life, people want to have the option of moving to a more suitable type of accommodation close to their existing home – the only way that we can ensure this is possible is to support the development of later-living schemes all over the country, and in all different sorts of settings.

“The taskforce needs to take a truly holistic view of the solutions, and cross-department working will be essential in delivering these solutions. Let’s hope that this once-in-a-generation opportunity for meaningful and significant change in delivering housing for older people is seized and much positive change emerges from it.”

This article was originally published by Property Week on 6 July 2023 and can be read here in full (behind their paywall).

The year of the great care home revival – Amy France writes for CoStar

• 6 June 2023
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Commercial Real Estate Partner and Head of Later Living, Amy France, has written for CoStar on how 2023 is seeing a return to full health for the care home sector, following a period of dramatic drop-off in terms of occupancy rates during the pandemic.

France explains that there are several positive factors that have seen the sector return to pre-pandemic occupancy levels (84.3%, Knight Frank 2022). The first reason is that of the significant growth in our ageing population, with the number of over-65s set to reach 17 million by 2040. “The research suggests that the number of older people’s housing units constructed per year to meet this demand will need to rise from 7,000 to 50,000.”

Beyond the need for more units, there is also a need for better quality units; near to 80,000 have been removed from the sector over the last decade due to them being below standard. “Although some of these have been replaced, overall the number of care home beds in the UK are 5,000 less than five years ago.”

“This growing lack of suitable housing for our ageing population represents an opportunity for investors to improve the lives of older generations, generate both social and financial value, and in turn satisfy the social element of ESG metrics. For example, our client Octopus Real Estate recently became a signatory of the Operating Principles for Impact Management, a global standard for managing investments for impact.”

Long-term resilience is also evident within the sector, with an increased demographic demand and fee rises despite a cost-of-living crisis due to the fact that “the older generation [are] generally wealthier, with more money to spend on better quality care homes.”

France highlights how care homes have consistently produced higher returns than other sectors and so asks: “what are we going to see in terms of delivery as the year unfolds?” She describes seeing a sector that “is emboldened by the significance of government and regulatory support in both the short and the long-term.”

France predicts that the incoming announcement of the Older People’s Housing Taskforce and the proposed updates to the National Planning Policy Framework (coupled with market fundamentals) “should see institutional money continue to flood into the sector.” Further to this, she adds, care home investment has also become popular with foreign investors, particularly when they are fully managed and deliver regular income.

“This is a great opportunity for the real estate sector to improve the lives of older people, achieve stable returns and deliver this much-needed aspect of our community infrastructure.”

This article was originally published by CoStar on 23 May 2023 and can be read here in full (behind their paywall).

Taking Care: Europe’s (sometimes) controversial later living market – Amy France speaks to Institutional Real Estate, Inc.

• 2 May 2023
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Commercial Real Estate Partner and Head of Later Living, Amy France, is quoted in Institutional Real Estate, Inc.’s latest piece on Europe’s later living market, which looks at how private capital is sometimes prevented from entering the sector, and how more uniform regulation could reassure investors.

The article describes how “care homes and senior living, such as retirement villages with medical and hotel-style facilities, are proving popular with investors across Europe.” While there is a clear reasoning for such investment trends, when understood alongside Europe’s ageing, affluent demographic, there are still several challenges which need of tackling.

One such challenge is fragmentation within the sector, on which France comments: “This is a story of two halves, concerning regulation and planning. In the UK, care home regulation is in a good place compared to other types of retirement living, but many believe that increased government guidance on leasehold structure and deferred management fees, for example, would help the sector grow, providing consumers with more reassurance. And planning remains an issue, with consented sites in short supply.”

This article was originally published in the May 2023, Vol. 7, No. 5, edition of Institutional Real Estate, Inc. and is available here behind their paywall.

Government’s older person housing taskforce has its work cut out – Natalie Cameron writes for React News

• 25 April 2023
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Commercial Real Estate Senior Associate and member of the Later Living team, Natalie Cameron, has written for React News on the Government’s recent progress in establishing an “Older People’s Housing Taskforce” and the appointment of Professor Julienne Meyer as its Chair.

The taskforce was first announced in the February 2022 ‘Levelling Up’ white paper and is being launched by two Government departments – the Department of Health and Social Care (DHSC) and the Department for Levelling Up, Housing and Communities (DLUHC).

Cameron highlights the differential between the UK and countries such as New Zealand, Australia and the USA, in terms of the availability of homes “with on-site care available”, with the UK (0.6% of total units) lacking far behind similar nations (5-6% total units).

Recognising this supply issue, the taskforce’s purpose is “to work across housing, health and care sectors to drive an increase in the volume and range of housing options, with a particular focus on boosting ‘housing with care’ numbers.”

This is an important issue, as highlighted in Professor Les Mayhew’s review for City University, which concluded that to meet demand, one in four new homes must be built with “housing with care” in mind. This equates to 50,000 of such homes built each year.

Cameron goes on to emphasise the significant role of taskforce appointees in delivering the vision of the ‘Levelling Up’ agenda and state how upcoming legislation aimed at enabling sustainable housing options “tailored to the varying needs of older people will be crucial in the integrated provision of facilities and care services.”

An additional focus for the taskforce will be on potential solutions to the supply of adequate later living housing, including providing clarity on the role of “housing with care” in regard to the planning system and leasehold reform.

The taskforce (consisting of 14 members from a variety of sectors within the later living sphere) will run for 12 months and will work independently of both DLUHC and DHSC ministers, with interim findings to be published after six months.

Cameron concludes by writing: “It is clear that the work to be done by the taskforce is both urgent and vital in enabling the required pace of development of later living accommodation.”

This article was originally published by React News on 20 April 2023 and is available here in full (behind their paywall).

The later living sector needs a boost – Amy France speaks to Property Week

• 20 January 2023
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Commercial Real Estate Partner and Head of Later Living, Amy France, has spoken to Property Week about the International Longevity Centre’s research into Later Living and how this can trigger progress by tackling issues that have held back growth and innovation in the sector.

With the number of over-65s set to reach 17 million by 2040, the research suggests that the number of older people’s housing units constructed per year will need to rise from 7,000 to 50,000.

A considerable boost in production is therefore necessary and France outlines several steps that can be taken to facilitate this. She specifically mentions sector-specific legislation, local authority targets and widespread planning exceptions as methods to increase clarity, accountability and viability of developments. She also references flexible tenure options, such as shared ownership agreements and stamp duty land tax removals.

France says: “There is no lack of good ideas for how we can get the sector motoring. We need the public and private sectors to work together to escalate delivery. This means putting some meaningful incentives in place for later-living development to thrive.”

This article was first published in Property Week on 19 January 2023 and is available to read in full here, behind their paywall.