The government’s consultation into how affordable housing requirements should work in the build to rent market has revealed deep divisions between developers and authorities.
Both the private and public sectors broadly agree that there needs to be policy intervention to recognise BTR in the National Planning Policy Framework. However, major points of contention have emerged around what affordable rents should be set at, what their terms would be, and even whether affordable private rent should be the affordable tenure of choice.
The consultation was in response to changes to affordable housing provision laid out in the Housing White Paper.
Developers and investors in the nascent sector have argued that traditional affordable requirements – providing a percentage of units to be run by a third party – was damaging to the viability of schemes, which needed to remain in their control. The alternative was APR – tenure blind units in the scheme let at a discount to social tenants but remaining under the management of the operator.
While not promising anything, the Housing White Paper was applauded for saying it would consult on changing affordable housing provision in build to rent schemes, recognising they could not compete with for sale development.
The consultation had 221 respondents, with 36 classifying themselves as BTR developers or investors, and 68 as local authorities.
While 85% of respondents said the National Planning Policy Framework should refer explicitly to the build to rent market, 78% said market and regulatory failures warranted national policy intervention.
However, local authorities are considerably more sceptical than private developers on the government setting an explicit policy recommendation for affordable rental housing to be allowed in lieu of regular affordable housing, and its usefulness.
And when it comes to the specifics of affordable rent in schemes, major divisions emerge.
Only one in five developers think the length of affordable tenancies should be three years, against nine out of 10 local authorities.
And 88% of authorities think an affordable rent should be 20% of homes, at 80% of rent on a three-year tenancy for an indefinite period.
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