Government puts emphasis on rental sector
Government moves emphasis to rental sector
Speaking at this week’s RESI conference Gavin Barwell, the new housing minister, has used his first major speech to shift Government policy away from what has been an almost single focus on home ownership and open up more investment into the rental sector.
He also indicated that the Government is considering abandoning its pledge to build 200,000 starter homes by 2020 due to this shift towards supporting the rental sector.
The Government campaigned on a policy of building houses which would be sold to first-time buyers at a discount of 20pc. However, Mr Barwell said that such policies which encourage ownership and increase the level of demand could affect the number of homes built for rent.
He said: “There’s a little bit of a tension between the overall supply objective and measures specifically to help people on to the housing ladder”. He indicated that affordable rental homes may now be included in that target figure for starter homes.
Mr Barwell added: “The way you make housing in this country more affordable to rent and buy is you build more homes. There is still a role for the government doing specific things to help people on to the first rung but this can’t be at the exclusion of all else.”
In the past, Government policy has largely backed ownership, at the expense of developing the rental sector. The Starter Homes policy, which has been greeted with a hesitant response by much of the property industry, has been changed to make councils require a certain amount of them on developments.
The rental sector has been hit by government policy to dissuade new landlords joining the market (the 3% additional stamp duty for buy-to-let landlords, for example) amid concerns that the buy-to-let sector was overheating.
Mr Barwell added: “ A growing number of families and young professionals are choosing the private rental sector, and while home ownership is still the goal for the majority, many will rent for some years before they buy.
“I’m very clear that our ambitions will never be achieved without a significant boost in institutional investment to the private rental sector, to ensure more choice and quality for people living in rented accommodation.”
Mr Barwell also gave his backing to build-to-rent schemes, by adding “Recent growth in the bespoke rental market has been impressive, but this progress must be expanded.”
London’s deputy mayor for housing, James Murray, added his backing to the private rental sector, while defending his 50pc affordable housing target.
He said: “If we’re going to increase supply and have affordable housing within that, you need to use every route of delivery, and if build to rent can deliver at scale and speed then we should support that”.
The shift in policy will be welcome news for landlords as more government focus on the rental sector might be the prelude to reversing the 3% stamp duty imposition. Recognition by politicians that the UK needs a strong private rental sector is long overdue.
If you are an existing landlord looking to expand your portfolio or a new investor seeking to start your journey into the buy-to-let market, we are able to offer a range of services and high quality advice and guidance. For more information, call Tom on 020 7205 4060 or email him at [email protected] or visit sourceinvestments.com