BPF RESI 2019: The BPF residential conference featured debate between developers, politicians and economists, with some Brexit forecasts mixed-in.
This year’s event, “Questions with answers: getting ahead in the residential sector”, saw industry leaders from Sir Oliver Letwin to Grainger chief executive Helen Gordon weigh in on issues including how to hit that 300,000 annual homes target.
On the agenda: house price predictions in political uncertainty; housing minister industry cajoling; mixed-use regeneration and public land; affordability; build-to-rent; modular homes and rent caps. In case you missed it, here are the top takeaways.
1. “Unprecedented shock’ of no-deal Brexit will hit housing
Housing will be particularly impacted in the event of a no-deal Brexit, warned PricewaterhouseCoopers’ chief economist John Hawksworth.
Hawksworth said a no-deal scenario would be “an unprecedented shock” for the UK economy. He said house prices growth could be hit by double-digit declines, but noted that the Bank of England GDP drops of 8% “really are a worst case”. While the build-to-rent sector may offer some support, Hawksworth put emphasis on the importance of the autumn spending review.
“The key issue for housing is what happens in the spending review at the autumn Budget this year. Will the government put its money where its mouth is? Is the government really going to back this 300,000 homes target?”
2. Malthouse: “Housing industry should double-down delivery”
Housing minister Kit Malthouse reaffirmed his commitment to the 300,000-homes-a-year government goal and called on the industry to “double-down” delivery.
Malthouse said: “Whatever the weather over the next two or three months, we do hope you will double-down and expand your output. Whatever your view of Brexit, it’s vital that we all put our shoulders to the wheel.”
He celebrated advances in planning; funding and local government enabling that should give the industry confidence and welcomed new ideas. “The door is always open to new ideas and new thinking.” However, he added that it is a two-way street.
3. Shadow minister: Brexit is a “convenient cover”
Shadow housing minister John Healey has pointed to Brexit as a “convenient cover” for government failure to deal with housing market changes.
Healey said Brexit had been a “distraction for public policy and for government”. He said: “In the last two-and-a-half years this has caused an almost unprecedented breakdown in the work of government, on a range of unprecedented fronts.
“What this has meant for housing is the government has been stuck on hold on a number of really important programmes.” He said initiatives including leasehold reform; cladding removal, starter homes, and the government response to the Letwin review have all fallen by the wayside.
“People say the government is doing the best it can with Brexit. I have to say this has got to be a convenient cover for a non-Brexit department, especially as the department has just as many staff as it did in 2010, before the start of the civil service cuts.”
4. Resi needs commercial and retail to survive
Residential schemes need to incorporate commercial and retail offering to avoid becoming obsolete, according to panellists at BPF Resi 2019.
At the public land discussion, regeneration experts pointed to employment space and evolved retail, focusing on experience over consumerism, as key components in the housing developments of the future.
“The old paradigm of residential, commercial and retail, forget it, that’s gone,” said Jo Negrini, chief executive at Croydon Council. “We need fluid, flexible, proper mixed-use. That’s where there will be a future; it won’t be in 40-storey residential towers. What we’ve learned to our detriment in Croydon is if you hang off one type of use, it becomes obsolete at some point.”
5. Saying no to affordable restraints and ‘draconian’ rent caps
When asked if the 35% GLA affordable housing target is limiting delivery, Grainger’s Gordon was frank. “The 35% is proving to be a drag on building decent homes for a rental platform,” she said. “If you add onto that a mayor that is determined to get re-elected on his vote for rent controls, I think you are going to see a housing crisis in the capital that is significantly worse.
“What most professional PRS landlords will sign up to is market tenancies – three- or five-year tenancies and we give residents visibility into how much their rents will go up.” Gordon recommends “self-regulation” within the industry, which she says makes PRS operators competitive by ensuring residents stay.
“If we have draconian rent controls that come in as a political requirement, I think you’re going to see even less development in the sector.”
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