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Fresh insights into the Build to Rent (BTR) sector emerged following last weeks’ Homeviews’ Resident Choice Awards. Whilst the awards were solely based on resident experiences, they sparked a new conversation among stakeholders about the sector’s wants and needs, particularly in light of potential political changes. With the prospect of a new Labour Government on the horizon, there’s heightened anticipation around the policies and initiatives that could shape the future of BTR. In this blog post, we delve into what the BTR sector needs from a new Labour Government, drawing from the reflections of the Homeviews’ awards.

The perception of BTR from Westminster

The Build to Rent (BTR) sector in the UK has emerged as one of the fastest-growing sub-sectors in the housing market. This growth is fuelled by various factors, including demographic shifts, changes in lifestyle preferences, and the ongoing housing shortage in the UK. However, recent research conducted by Cavendish Consulting and YouGov reveals concerning statistics about the sector’s perception among MPs. 

  • The survey found that, when asked to name three housing sectors, just 14% of Conservatives and 10% of Labour MPs would prioritise BTR homes in their constituency, while 63% of Conservative MPs prioritised private sale housing and Labour MPs were more likely to prioritise council housing and social rent homes;
  • Shockingly, BTR homes ranked only 7th out of eight listed housing options in terms of priority among MPs.

The Labour way

In an address last year to the British Chambers of Commerce, Sir Keir Starmer articulated a bold vision for the future of the UK’s economy under a potential Labour Government. Amidst ongoing debates and challenges, Sir Keir emphasised the imperative of propelling the nation towards prosperity by addressing key barriers and fostering growth. 

Central to his agenda is a commitment to “get Britain building again”, recognising the consistent obstacles hindering progress in the housing sector. He highlighted the chronic shortage of affordable homes, the awkward planning regulations, and the pressing need for investment in infrastructure. Sir Keir’s pledge to revitalise the construction industry not only aims to address the housing crisis but also to stimulate job creation, boost economic activity, and enhance the overall quality of life for citizens across the country. As the political landscape prepares for potential shifts, those within the build-to-rent sector eagerly anticipate what an incoming Labour government could bring to the table. 

Against this backdrop, the Labour Party has proposed sweeping reforms to the planning system, aimed at addressing the housing crisis and promoting affordability. Key proposals include the construction of 1.5 million homes over the next Parliament, with a focus on supporting first-time buyers and increasing the supply of affordable housing. These reforms seek to expedite the local planning process, empower local authorities to negotiate with developers for affordable housing, and incentivise brownfield development (including what they are calling the grey belt, brownfield sites within the greenbelt). Additionally, Labour plans to devolve more power to Mayors, enabling them to have greater control over housing investment and planning decisions.

While these proposals hold the promise of addressing critical housing challenges, they also raise questions about their feasibility and potential impact on the BTR sector. Landlords and investors must closely monitor developments in Labour’s planning reforms and assess their implications for their investment strategies and operations.

While the sector will undoubtably benefit from a focus on building more homes, there is a danger that Labour’s focus on home ownership and social rent could squeeze out the sector. 

What does the Build To Rent sector need from a Labour Government

In conclusion, the Build to Rent (BTR) sector in the UK is poised for continued growth in 2024, driven by rising demand for high-quality rental properties. However, this growth is accompanied by challenges, including regulatory uncertainties and reputational risks. To navigate these challenges successfully, stakeholders must prioritise transparency, innovation, and advocacy for favourable policies. The proposed planning reforms by the Labour Party offer both opportunities and risks for the BTR sector. While they hold the potential to address housing shortages and promote affordability, they also introduce uncertainties that require careful consideration and adaptation by industry participants. Overall, the BTR sector remains an attractive investment opportunity, with the potential for significant returns for landlords and investors who prioritise collaboration, innovation, and responsiveness to market dynamics.

Moreover, as Labour positions itself as the ‘party for housing,’ appealing to a demographic disillusioned by the housing crisis, the BTR sector stands to benefit from increased attention and potential policy support. However, any incoming Labour Government must recognise the importance of balancing support for home ownership with addressing the challenges in the Private Rented Sector. Simply focusing on increasing supply without addressing issues of security and affordability in the rental market may not effectively tackle the housing crisis. Thus, a nuanced approach that considers the needs of both renters and prospective homeowners will be crucial in shaping the future of the BTR sector under a new government.

Key recommendations for the Labour Government

  • Implement planning reforms that streamline processes for BTR developments, facilitating their timely approval and construction;
  • Introduce incentives and funding mechanisms to encourage private investment in BTR projects, increasing the supply of high-quality rental properties;
  • Work closely with industry stakeholders to develop regulations that balance the interests of landlords, tenants, and local communities, ensuring fair and transparent rental practices;
  • Invest in infrastructure and amenities that enhance the liveability of BTR developments, making them attractive options for renters;
  • Collaborate with local authorities and housing associations to identify suitable sites for BTR developments and address housing needs in underserved areas;
  • Provide financial support and resources for initiatives that promote affordable housing and address homelessness, including partnerships with BTR operators to allocate units for low-income households;
  • Support for increasing standards in the PRS, with the aim to replace poor quality homes, so often provided in the buy-to-let sector with higher quality homes, such as those provided by BTR.

by Alexia D’Rosario, Senior Account Executive