Welcome to your weekly round-up of residential stories from EG.
After months of talks with government ministers and housing officials, the build-to-rent industry has won an exemption from a £2bn developer tax.
The industry came together in extensive engagement with the housing minister, Department of Levelling Up, Housing and Communities, and the Treasury, to fight BTR’s inclusion in the Residential Property Developer Tax.
The tax on developer profit is set to come into force next April to raise money for cladding remediation. BTR experts have consistently argued the tax would be a dry tax on a notional profit that does not exist, given that landlords retain assets to rent.
BTR owners pay for their own remediation and further taxation could restrict viability and adds uncertainty risking investor confidence.
Ed Crockett, head of UK residential investment at Aberdeen Standard Investments said: “It is a defining moment for the BTR sector that came together over a wide range of disciplines to clearly explain to the government the challenges and impact of including BTR in the legislation.”
As the sector celebrates, some are looking to the future. Kurt Mueller, director of corporate affairs at Grainger, said: “As an industry, we’ve learned an important lesson from the RPDT, which is not to take for granted that everyone understands BTR and our business model. Now, more than ever, we need to redouble our efforts to educate national policy makers, local government and even renters on what BTR is all about.”
The British Property Federation is keeping this in mind as it moves on to the next big challenge for the sector: tenancy reform. Ahead of the tenancy white paper later this year and the Comprehensive Spending Review this month, the BPF has released its formal response. The trade body said it supports reform, but only with proper investment in the UK courts and evictions processes.
Failure to create a new system that works for residents and owners “could jeopardise much-needed investment in new high-quality homes for renters across the UK,” said Ian Fletcher, director of real estate policy at the BPF.
Elsewhere, real estate lending is seeing a “strong but sober” recovery, after drying up during the pandemic.
The latest UK Commercial Real Estate Lending Report from Bayes Business School tracked £23.3bn of new loans during the first half of 2021 back to its level at the same point in 2019 and up by 50% on the same period a year ago. Meanwhile, European investors are also planning to boost their allocations to regional non-listed real estate debt products.
Residential developers are reaping the rewards of that pick-up. Just this week, Great Marlborough Estates has inked a £76m deal backed by private equity giants Apollo and Carlyle. And housebuilder Hayfield has extended an existing facility with OakNorth Bank to expand its footprint around middle England and the commuter belt.
View the magazine, download the app (iOS and Android) and read on for more of the week’s headlines:
‘Seeing change is a powerful thing’: King’s Cross 10 years on
Khan orders GLA housing review
Lloyds’ PRS business grows with development hire
Second High Street Group auditor resigns
Civitas blanks ShadowFall after latest open letter
Grainger takes Southall BTR scheme in £141m deal
Metropolitan Thames Valley strikes deal for affordable housing at Manor Road Quarter
Hestia dials up affordable homes with £100m BT site buy
Reimagining London: the affordable housing crisis
Places for People and Ilke agree pair of schemes
Bolton Council seeks developers for town centre sites
Tiger hunts Guildford co-living consent
Inland wins approval for Dagenham Docks development
PRS REIT doubles revenue as profit soars
OnTheMarket continues upward climb
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