A residential real estate investment manager has published a White Paper on the Build to Rent (BTR) sector and the pivotal role it can play in the government’s plan to build back better from the pandemic.
The White Paper – Build-to-Rent: Helping the UK Build Back Better – from Long Harbour sets out how BTR can support the UK’s social and environmental challenges.
It also outlines how the BTR sector is well-positioned to help rebuild the economy and fuel the housing market through the cost-of-living crisis and beyond.
It argues that the method of funding BTR through long-term institutional investment – including the likes of Goldman Sachs and Legal & General – ensures a ‘long-term, stable financial backing’ for development, ‘producing high-quality, affordable homes’.
By building modern and sustainable homes, the firms add that the BTR sector can drive the government’s commitment to net-zero (by 2050) and a green recovery from the pandemic, ‘stimulating the behavioural change required across the industry’.
Furthermore, the White Paper argues there is an important role for BTR to play in levelling up across the UK – the Boris Johnson’s administration’s flagship policy – by investing in regions where housing need is acute, whilst building ‘real communities’ that bring together existing and new residents.
As well as setting out the benefits of BTR, the White Paper also urges the government to support the growth of the sector, which has grown fast since appearing in the UK around 10 years ago and now accounts for between 2-3% of the private rented sector overall according to estimates.
Most importantly, Long Harbour believes that there should be fair competition for BTR with other parts of the housing market. With this in mind, it has called on the government to avoid regulations that will discourage investment in the sector.
The paper also states that there is a lack of policy focus on BTR and its potential advantages when it comes to UK growth. To combat this, it suggests the creation of a ministerial position with responsibility for BTR in the Department for Levelling Up, Housing and Communities.
Additionally, the company has called on the government to remove barriers which are stopping Modern Methods of Construction (MMC) from ‘becoming an integral element of housing delivery, as well as financial incentives which speed up BTR’s contribution to the building of greener, more efficient homes.
It argues that, by removing these barriers to entry, more BTR developers could improve energy efficiency, reduce waste and deliver housing stock with a longer life cycle.
“The BTR sector has remained exceptionally resilient throughout the pandemic thanks, in part to the fundamental strength of its investment model,” James Aumonier, chief operating officer at Long Harbour, said.
“The White Paper underlines BTR’s strength to significantly increase the supply of housing across the UK, level up the regions through investment and regeneration, whilst playing a key role in the UK’s efforts to transition to Net Zero.”
He added: “As we enter the worst cost-of-living crisis in 40 years, we will continue to discuss with policymakers the importance of continued investment and how the sector can help deliver on the government’s priorities.”
The full White Paper can be seen here.
