Yahoo Finance Build, Baby, Build: We’ll never fix the housing crisis without private capital
It is only by close collaboration between the public sector, private companies and institutional investors that we’ll be able to deliver housing of all tenures at scale, stabilising the market and ensuring more people are able to live better, says Rick de Blaby
As someone who runs a business where a third of our workforce is under 30, I know how important it is to be providing homes across London that people can not only afford, but also where they want to be. Homes that are high quality and energy efficient, within neighbourhoods that enable connection and community.
It is in no one’s interest for this city’s next generation of talent to be forced out of the capital because a lack of housing has forced up the cost of rent and mortgage repayments.
Yet the shortage of fit-for-purpose, affordable housing continues to be a long-standing systemic issue.
The December 2023 Housing Delivery Test figures found that 22 London authorities failed to meet their individual housing delivery targets between 2019 and 2022, and, of these, 13 fell at least 25 per cent below their mandated housing delivery requirements. And this comes as the buy-to-let market is increasingly shrinking, putting further pressures on housing.
It is clear that if we’re going to have any chance at making a meaningful dent in the housing crisis, the significant levels of private capital are going to be required. For an idea of the scale, an estimated £250bn worth of global capital is needed over the next seven years for rental housing alone.
The build-to-rent (BtR) industry, which is backed by sophisticated, long-term investors – many of whom are pension fund custodians – has an important role in making this happen, bringing forward not only the market rental homes that are in such high demand, but also significant levels of affordable homes.
For us to do that at the scale that is required, we must break down the obstacles to growth.
In the lead up to the general election it is encouraging that all parties are considering ways in which we can boost housing delivery and we were pleased to see Labour’s pledges to build more high-quality, well-designed and sustainable homes, while also supporting councils and housing associations to make a greater contribution to affordable housing supply.
Whichever party is in government in the next few weeks has to start by being able to ‘sell’ what that grand vision is for housing in the UK. People need to see how development can be a force for good and the country must be positioned as a compelling investment case so that we have the capital to deliver it.
Given the levels of demand, it should not be a difficult feat to attract the global capital that is required, however the risk of further red tape and any calls for rental controls serve as an immediate deterrent for that capital, stifling growth in a sector that badly needs it.
Indeed, we were the closest we have ever been to passing the Renters (Reform) Bill, which had struck a good balance between protecting renters and maintaining an appealing market for investment. It is therefore a shame, for the benefit of the 11m tenants and 2.3m landlords across England, that the Conservatives weren’t able to see this through before the Election was called.
On top of that is the well-documented problem of our planning process, which is under-resourced, complex and lengthy.
As we approach a new political period come 5 July, I am optimistic that we can set the UK up for growth. It is only by close collaboration between the public sector, private companies and institutional investors that we’ll be able to deliver housing of all tenures at scale, stabilising the market and ensuring more people are able to live better.
At Get Living, we’re delivering one of the capital’s major regeneration projects at Elephant and Castle, which will bring a new mixed-use town centre to the area, comprising shops, restaurants, work space and homes, of which a significant number are affordable. This project should serve as the blueprint across the country.
The BtR industry is one of the few that has the investment and appetite to deliver more private and affordable homes. That is why it is crucial that our future government works with the sector to achieve that growth for the benefit of all.
By Rick de Blaby, Chief Executive at Get Living
