In recognition of the private rented sector’s growing prevalence in London’s housing market, Future of London launched a seminar series to explore different facets of this sector, in partnership with PwC. The first event on 8 November 2012 examined the policy landscape around the private rented sector. Speaking at the event were:
- Terrie Alafat, Director of Housing Growth and Affordable Housing, DCLG
- Richard Hill, Deputy Chief Executive and Executive Director – Programmes, HCA
- Professor Christine Whitehead, Professor of Housing, LSE
- Jamie Ratcliff, Area Manager, Housing & Land, GLA
The presentations outlined that there is current government recognition of the importance of the private rented sector, and of its expansion. However, currently growth in the sector reflects change in tenure, not increase in supply. In London, 80 per cent of growth has come from tenure change. Therefore, there was agreement across CLG, HCA and GLA that emphasis on PRS policy must be on increasing supply.
CLG reminded us of the commitments they made following the Montague Review:
– £200mn private equity fund to stimulate market
– £10bn debt guarantee scheme for PRS and Affordable Housing
– Taskforce to support demonstration projects and look after brokering arrangements.
In London, the GLA is talking to the London Pension Fund Authority, and have commissioned Savills to do a feasibility study looking at volume of supply.
The picture in London is mixed: while opportunities lie in the Mayoral responsibility for housing and large land portfolio at his disposal, rents are rising and one third of PRS housing currently fails Decent Homes standards, demonstrating significant need for investment.
Finally, it was agreed that PRS presents a significant role for Housing Associations, though members of the audience raised doubts as to whether HAs could move into speculative house building, and how they could borrow amounts required without breaking their net worth covenants. Hopefully questions will be answered at the seminar on housing investment, when David Montague, L&Q discusses their approach to the sector.
The presentation from the event, including slides from Richard Hill and Prof Christine Whitehead, can be found below.