The property industry has welcomed the Montague report’s recommendations to kick-start investment in private rented housing.
The report, published today, outlines the findings of a review led by 3i chairman Sir Adrian Montague, into ways to encourage greater investment in privately rented properties.
Gavin Smart, Chartered Institute of Housing director of policy and practice, said: “Boosting investment in all types of housing provision is vital – and CIH maintains that housing has a major role to play in economic growth.
“New measures to release public land and to assist local authorities and developers in terms of planning are an encouraging step forward.”
Sue Foxley, head of research at Cluttons, said the recommendations would particularly help London. This capital is “crying out for this type of housing which is specifically developed for renters”, she said.
She added: “A large and growing proportion of professionals will remain long-term renters in London.
“Long-term investors genuinely add to the housing stock and through focused and efficient management look at income returns, not capital growth. There is an opportunity here to radically transform the rental market to the benefit of tenants.”
British Property Federation chief executive Liz Peace added: “Encouraging institutions into building homes for rent has for some time been seen as the holy grail in enabling a long-term, private rented sector that is designed and built to let and offers renters something a bit different in the marketplace.”
Sue Cocking, Knight Frank head of affordable housing, said: “If we are serious about stimulating the private rental sector, one of the key ways of achieving this is for local authorities to factor in the lower land values supported by private rented property in their planning assessments, and accept that schemes will not always be able to deliver section 106 aspirations, including as much affordable housing.
“They can, however, use planning conditions to control the use of private accommodation for rent for a minimum period. Between ten and twenty years sounds as though it might be acceptable to the market. The Montague report makes this clear, and acknowledges the growing demand for good-quality private rented accommodation, and the important community and economic benefits it will bring.”
Grainger executive property director Nick Jopling described it as a “critical step”.
He said: “The recommendations of the Montague Review, if implemented, could unlock a wealth of funding from long-term, reputable institutional investors, such as pension funds, for the construction of good-quality homes, built specifically for renting, giving not only a much-needed boost to the construction industry but also providing the customers/tenants with the stability and security they want in their home.”
Savills head of residential investment Peter Allen said: “Sir Adrian’s report gives over a sensible section to yields and in particular the perceived concern that residential is unable to deliver suitably high income returns.
“He goes some way to dispel this myth but also highlights the need for higher rental levels if there is to be a change of paradigm to a long term investment market.”
Labour shadow housing minister Jack Dromey said: “Many of the measures recommended in this report are sensible, for instance on the use of public land, on attracting investment and on standards in the private rented sector.”
But he added that he was “not convinced that the answer to the crisis created by this government is to further water down affordable housing requirements that councils place on developers”.
nick.whitten@estatesgazette.com
