In a housing market strained by demand, cost pressures and evolving community needs, the tri-tenure model – combining homes for sale, affordable housing and build-to-rent – is gaining traction among developers, investors and policymakers.
At an Estates Gazette roundtable at UKREiiF, key voices from across the UK’s property sector explored the benefits, challenges and future of this diversified approach to housing delivery.
David Melhuish, director at the Scottish Property Federation, part of the British Property Federation, opened with a strong endorsement of the model. “BPF has voiced a lot of support for the concept of tri-tenure housing delivery,” he said, citing national consultations and success stories like Bertha Park in Perth and Kinross. “One of the attractions behind it is a diversification of income and risk for investors, but another attraction of course is for the communities themselves.”
Naomi Beckett, land director at Vistry Group, emphasised that tri-tenure supports Vistry’s mission as a “partnerships house builder”. She said: “We recognise that the housing market is more nuanced than that. People are on various stages of that housing ladder. To fundamentally address that housing need at the outset of a project mitigates the risk of those slightly more complex projects by blending our finance with our partners’.”
On the ground impact
Emma Mountford, director at Prichard-Selby and board member at Great Places Housing Association, brought both development and housing association perspectives: “We’ve got a number of schemes where we’re providing both social affordable rent and shared ownership.” Tri-tenure, she added, “helps to unlock those sites” and reduce delivery timelines significantly: “It can bring the delivery down to three or four years, which makes the financing viable.”
Ben Fry, fund manager at Thriving Investments, spoke of the financial and social impact of mixed-tenure investment. “The big benefit we see is building mixed communities,” he said. “We can help to support the infrastructure spending and wider community pieces which then drive value in private elements of the scheme.”
Jason Dunlop, tax partner at S&W, highlighted structural complexity as a persistent challenge: “There probably isn’t a one-size-fits-all solution to any of this.” He added that tax implications can be especially tricky: “VAT is always complicated. You’ve got a mixture of houses being built for sale and houses being built for rent, and the fact profile on that is very different,” he said.
Dunlop also warned that changes mid-project, from build-to-sell to BTR, for example, can trigger costly issues: “That can cause some big problems from a tax perspective. That can often lead to dry tax charges that are unfunded.”
Planning realities
Planning remains a hurdle. “There’s still a very traditional mentality about delivering smaller scale developments and ensuring that we’re protecting houses for sale,” said Beckett. “But certainly on the larger scale schemes, it tends to be built into the narrative before we even get to the planning stages.”
Melhuish echoed the challenge, noting that Section 106 and housing mix negotiations are often where things get sticky. “Authorities just suspect that in the longer term [discounted BTR] is just going to be market rate,” he said. “You need that good understanding and collaboration with your local authority.”
Fry emphasised the value of listening early: “In some particularly rural locations, there’s not enough infrastructure to support social rent, for example.” Understanding local context, he said, can determine the right mix of tenures.
All agreed, early engagement is vital. “You need an army to achieve what we spoke about,” said Beckett. “Unless you’ve got tried and tested partners, it can all fall down like a house of cards.”
Mountford added, “Different departments within the same local authority don’t necessarily speak to each other.” The lesson? “Get that input early on from all departments.”
From the investor side, Fry underscored the need to plan beyond appraisals: “There are things you may not have baked into appraisals from day one, but they continue to change, and potentially add cost.”
Still, the consensus was clear: tri-tenure is more than a passing trend. “We’d be foolish to sit here and say that [some builders] wouldn’t pivot back to for-sale,” Beckett admitted. “But our business model at Vistry is not that. I focus on sites which are going to be more suitable for multi-tenure development.”
Melhuish concluded with cautious optimism for Scotland’s stalled BTR market. “I’m hoping that we’ll pick up the momentum again once we get past this housing bill.” As the roundtable wrapped up, one thing was evident: for those ready to embrace both its complexity and promise, tri-tenure and mixed-tenure housing are here to stay,
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