Build to Rent’s time to shine in Labour’s revised NPPF
By Brendan Geraghty, CEO, the Association for Rental Living (ARL)
Secretary of State for Housing, Communities and Local Government, Angela Rayner, made clear in her announced plans for a revised National Planning Policy Framework (NPPF) that the Government will be doing more to support mixed tenure sites. The announcement, made on 30th July 2024, explicitly included Build to Rent (BTR) homes as part of this plan.
All Build to Rent – multi-family apartment blocks along with Single Family Housing (SFH) and Co-Living – must be part of the solution for addressing the housing crisis, so the ARL welcomes the Government’s first explicit recognition of the role that such accommodation can play, especially in terms of community creation and pace of delivery. BTR is not just an important part of solving the housing crisis, it is also a platform to attract international investment into the UK.
Representing BTR and SFH operators, investors and suppliers across the UK, the ARL and its members stand ready to work together on the Government’s long-term housing strategy. As part of the revised NPPF, that means increasing housing supply with quality homes that put the customer at the heart of the development – very much the essence of BTR and SFH.
However, while acknowledging the positivity of the Secretary’s announcement, the ARL is conscious that the Government will need to help the sector deliver, and that much more is needed. We have long called for improvements to, and investment in, planning to unlock delivery of the new homes that are in such great demand in the UK. The severe lack of good-quality rental homes at present is a key factor in the housing crisis. It is driving up rental prices as demand outstrips supply, with 30% fewer homes available to rent across the UK today compared to the 2018–19 average (Savills).
As such, we continue our calls on government and policymakers for recognition of Build to Rent as a sector, including Single Family Housing, that delivers quality homes and service to customers. We also seek to raise awareness of how BTR and SFH act as a catalyst for regeneration and community creation.
There are numerous ways in which the Government can support the role of the BTR sector in meeting the UK’s housing needs. It can include targets for purpose-built rental homes within local authority housing targets, as part of a mixed-tenure approach that delivers homes for all. It could also implement fiscal measures that encourage investment in purpose-built, professionally managed rental homes. The re-instatement of Multiple Dwellings Relief on Stamp Duty Land Tax for Build to Rent schemes is one example of this.
The sheer scale of the BTR sector’s potential can do much to support the Government’s plans. Savills reports that investment of £300bn is needed to meet the future household growth requirements of an additional one million Private Rented Sector homes by 2031. The BTR sector has already delivered £35bn of investment, providing 115,000 completed homes in the UK in the past decade. A further 146,100 are currently in the planning and delivery pipeline.
If the UK was to adopt a similar level of institutional ownership as in established BTR and SFH markets, such as Germany and the USA, Savills points out that institutions would own between 2.1 and 2.4 million Private Rented Sector homes.
To unlock significant potential investment in the institutionally backed rental living sector, of which BTR is part, and deliver these additional two million homes, the ARL recommends policy interventions such as those suggested above. These will provide the clarity and confidence needed to encourage long-term investment in quality rental housing.
The BTR sector has the capacity to deliver such housing at scale and at pace. Compared to homes provided by individual landlords, BTR and SFH schemes are larger scale, with a single point of responsibility for customer care, safety and management issues. There is an inherent incentive to deliver homes of the highest quality and to incorporate best practice across urban and suburban BTR communities.
The ARL stands ready to work with the Government on the future development of BTR and SFH as a means of increasing housing supply and will be submitting to the consultation on the proposed NPPF review. In addition and to support this, we are leading the development of a Build to Rent Code of Practice, setting out standards of practice for the sector. These encompass quality of accommodation, customer service, response to resident issues, communication and resident wellbeing, as well as clear and fair terms of tenancy, supporting a high-quality rental experience, as well as the new NPPF and the wider Government housing strategy.