At the start of this year, the build-to-rent sector looked to have the potential possessed by few other areas of the property market when it comes to addressing the supply and demand issue that has been prominent in British housing for some time.
So when it was hit hard by the news that the industry would not be exempt from the new three per cent buy-to-let Stamp Duty surcharge that came into effect in April this year, there were worries that this would have wider reaching implications for the property market as a whole, both when it comes to rentals and purchases.
However, build-to-rent may be about to have its moment in the sun, with the call for more home starts to come this summer to help address the enormous shortfall the UK has in terms of new housing to meet demand. According to a report from the House of Lords, new prime minister Theresa May and her government must do more to encourage house building and improve the number of homes available nationwide.
300,000 new homes per year
The House of Lords Economic Affairs Committee report on house building said the government’s target for the number of new homes being built each year in the UK has to see a substantial increase, with a recommendation from the Lords that it should be risen by 50 per cent to 300,000 new homes each year.
“We are facing an acute housing crisis with home ownership, and increasingly renting, being simply unaffordable for a great many people. The only way to address this is to increase supply. The country needs to build 300,000 homes a year for the foreseeable future,” said Lord Hollick, chairman of the Lords committee.
And while the main focus of the report was to say that the government needs to free up housing associations in order to allow them to build, the private sector will also be required in order to ensure that slack is picked up, and that this demand, which cannot be achieved through the public sector alone, is met.
“Government policy to tackle the crisis must be broadened out to help people who would benefit from good quality, secure rented homes. It is very concerning that changes to Stamp Duty for landlords and cuts to social rent could reduce the availability of homes for rent. The long term trend away from subsidising tenancies to subsidising home buyers hits the poorest hardest and should be reversed,” Lord Hollick added.