Guide: Councils should calculate separate need for purpose-built private rented homes

Local planning authorities should set out the need for purpose-built private rented homes in a category separate to the general housing need in local plans, a think-tank has said in a new best practice guide.

Guide: councils should set out separate need for private-rented homes
Guide: councils should set out separate need for private-rented homes

Build to Rent: A Best Practice Guide, published by the Urban Land Institute (ULI) last week, warned that the UK’s planning system is geared too much toward delivering homes for market sale.

It argued that build to rent developers operate on a completely different financial model to traditional volume housebuilders, relying on long-term income streams rather than one-off capital receipts.

Yet, homes for rent are not considered separately from housing for sale within local plans, "despite the vast – and growing – number of renters exceeding nine million across the UK," the guide said.

The paper outlines three key benefits to councils setting out the need for rental accommodation within a local plan, including an ability to "better shape the whole housing offer in an area, across a variety of tenures".

It added that it would also allow planners to make sure "the part of housing need served by build to rent is planned for and shaped, rather than occurring on an ad-hoc basis via buy to let".

Finally, it said the measure would provide more clarity "to those investing in and developing build to rent schemes, giving them greater ability to acquire land and take a long-term view when creating delivery pipelines."

Dominic Martin, operations and strategy director at real estate investment and development company Westrock, said that while major cities like London and Manchester have taken "some steps to include build to rent in their planning policies, we have some way to go before there is a national, uniform appreciation of what the sector can offer".

Meanwhile, a report by the London Assembly Housing Committee last week said the new mayor of London should in the longer-term "lobby government to develop a dedicated planning use class for build to let which would enable new professional landlords to compete for development land on a level playing field, rather than competing with developers for market sale". 

The ULI Guide was unavailable at press time. 

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