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Private Rented Sector: Montague and beyond

Private Rented Sector: Montague and beyond. Mary Stallebrass Department for Communities and Local Government CIC 19 November 2012. Importance of the private rented sector.

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Private Rented Sector: Montague and beyond

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  1. Private Rented Sector:Montague and beyond Mary Stallebrass Department for Communities and Local Government CIC 19 November 2012

  2. Importance of the private rented sector Demand for rented housing is growing - the sector has already responded, and now houses 3.6 million households in England, compared to 2 million in the early 1980s The sector is very diverse: Half of all private renters are aged under 35 26% are couples with no dependent children Around a third are families with dependent children Government recognises the importance of the PRS and is keen to encourage further growth

  3. Much of the growth in the rented sector has been driven by individual landlords There are only a relatively small number of larger landlords – only 1% own more than 10 properties Growth in the PRS tends to reflect changes in tenure rather than new house building Growth in the Private Rented Sector

  4. Sir Adrian Montague: review findings • There is “real potential” for institutional investment in large scale developments built specifically for long term rent: • This type of development can bring in new money • Give a boost to housing supply • Provide more choice for tenants • Conditions for such investment are currently more favourable than they have been in the past as a result of: • Tax changes • Strong demand • Emerging models helping establish the concept & developing expertise

  5. Sir Adrian Montague: Barriers • Remaining barriers include: • The complexity of schemes, • Lack of links between developers, investors and land owners, • The novelty of this type of investment • Doubts remain about yields • Concerns about the planning system • More is needed to promote the rapid development of this new house building model

  6. Government Response • A new £200 million fund providing equity finance to housebuilders and developers to stimulate building for private rent • £10 billion debt guarantee scheme to support the delivery of additional new build rented housing • A new expert PRS investment taskforce to support delivery, and bring together the key players.

  7. Case Study: FizzyLiving • FizzyLiving will procure a portfolio of new apartments to rent to young professionals • All apartments will have a high standard of specification • The buildings will all have a building manager, providing a quality service

  8. Next steps • Response demonstrates Ministers’ confidence in the sector • Progress is being made quickly: • Expressions of interest were sought in Sept 2012 • The prospectus for the £200m fund is close to being finalised • The taskforce and its Director are due to be place by end Jan 2013

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