It was a speech that was designed to inspire the Conservative Party after a year of criticism in the wake of a poorly judged snap election, but on Wednesday (October 4th), Prime Minister Theresa May saw her address to her party overshadowed by various controversies.
First, a part of her speech was highlighted by eagle-eyed commentators as being very similar to one seen in US political drama The West Wing, and was also interrupted by notorious prankster Simon Brodkin (in his Lee Nelson guise), who handed the Prime Minister a mock P45 as she spoke.
However, in spite of the controversies and calamities that stole the headlines, Mrs May did make a number of promises, most notably around both energy efficiency and housing. For the latter, she promised what Damian Green, the Prime Minister’s deputy, saidmarks “a significant change” for the government, and said she would make house building easier in a bid to better meet demand “for all types”.
Built to Rent Sector
Primarily, the speech focused on council housing and the unlocking of land to make it easier for local authorities to start building again. But the promise could potentially open the door for the private rented sector as well, and allow demand to be met via the Build to Rent sector, which has returned impressive figures over the last few weeks in terms of the number of homes it is delivering. Read the Experience Invest review of the UK’s Build to Rent sector…
The announcement from the Prime Minister will see an extra £2 billion invested in affordable housing. The Conservatives say this will up the government’s spend on improving housing options between 2016 and 2021 to £9.1 billion, potentially putting a sizeable dent in the number of homes needed to meet demand.
In addition, the government is also looking for housing associations and councils in specified areas to put bids in for long-term guaranteed rent prices in order to better control what tenants need to spend and ensure that prices are not spiralling out of control in places where affordable options are needed. It will also give housing associations and councils the long-term security they need to invest more money.
However, while the government has promised that it will spend £2 billion extra on housing, it does have limitations on what it can deliver through this funding. It’s estimated that an average subsidy of £80,000 would mean this money being able to assist in the building of 25,000 affordable rental options. While this is significant, it would still potentially leave a gap in the market, which could perhaps be addressed by promoting the growing Build to Rent sector.
And the government’s apparent willingness to unlock more land for development nationwide could well be the window of opportunity needed to make this a reality.