The prime minister has announced his intention to tear up planning rules in a “crusade” to support home ownership that has dismayed investors in the nascent private rented sector.
David Cameron used his first party conference speech as leader of a Conservative majority government to set out plans to replace affordable housing requirements for rental homes with discounted “starter homes”.
The speech, which confirmed the Conservative Party’s manifesto commitment to deliver 200,000 starter homes priced at 20% below market value to buyers below the age of 40, was welcomed by housebuilders.
Stuart Baseley, executive chairman of the Home Builders Federation, said allowing builders to provide starter homes for sale instead of affordable rented homes would make more sites viable.
But PRS investors saw the policy as a troubling symbolic shift which “stigmatises” rental housing in favour of home ownership by a prime minister who had previously endorsed the recommendations to support the sector made by Sir Adrian Montague in 2012.
Grainger chief executive Andrew Cunningham said the policy, which is expected to be set down in the Housing Bill as early as next week, “misses the key point about modern living and ignores the benefits of professional rental schemes”.
Internos head of UK residential investment Andrew Taylor said the policy’s focus on ownership would be disappointing for institutional investors.
“What investors and developers need in order to make substantial PRS investment is encouragement from the government,” he said.
Ed Crockett, fund manager at Aberdeen Asset Management, added: “The best way to increase housing supply is to support the PRS and to understand it is trying to provide choice.
“The PRS can deliver that, and deliver it eight times faster than homes built for sale.”
