With less than a month to go before a new Prime Minister is hailed in, the REalyst takes a look at the housing policies proposed by the leading candidates vying for the position and what they could mean for the property development industry.
Read Time: 4 Minutes
July 23rd is the date when the UK announces its new prime minister. Boris Johnson and Jeremy Hunt both have their eyes on No.10 Downing Street, having beaten eight other hopefuls to make it to the final two. One of these two men will lead the nation.
Boris Johnson is the overwhelming favourite, to the point where he’s probably taking measurements at No.10 and looking for a cabinet (amongst others) from which to showcase his handmade model buses. But Britain does love an underdog story, so write off Jeremy Hunt at your peril.
Whoever ends up in charge will be tasked with tackling the largest of all elephants in the room: Brexit. Yet there will be other policies on the agenda once the UK secures its status with the EU, one of which is housing.
The housing crisis in the UK prevails. As such, there will be high expectations for the new prime minister to find a resolution. The answer to the housing crisis isn’t linear, nor is there a magic box with a one-size-fits-all solution. Something needs to give before things start moving in the right direction.
Solutions will come from many different pockets in the world of UK property, with each one crafted to fill a void where relevant.
Build-to-Rent is billed as a possible method, at least from a renting point of view. While it might not be the answer for how to increase home ownership, it does offer rental accommodation with a professional company looking after the maintenance side of things.
Over the next 6 years, BTR developments are expected to increase by 180%, which equates to roughly 10,000 new homes. Those 10k homes alone won’t solve the crisis, but ‘every little helps’, as they say.
The last few years have seen BTR complexes become a viable alternative to traditional renting methods. Instead of a contract between a private landlord and tenant, the renter signs a contract (usually a flexible one) with the company that owns the building.
Traditionally, BTR set-ups can be found in larger cities, such as London and Manchester. However, such developments are expanding to include more parts of the UK. Developers identify low-void areas where they can build new developments. Instead of selling them on, they manage and rent out the building themselves.
Apart from offering their thoughts on Brexit, along with a desire to avoid a no deal, neither candidate for prime minister has really dug their teeth into other issues. This isn’t necessarily their fault; the first question on anyone’s lips always starts with the big B word.
However, there has been the odd rumble here and there when it comes to broader policies and, more importantly, housing. Boris Johnson has been vocal on housing in the past, commenting that home ownership for those under 40 needs to increase. He’s also thrown his weight behind the New Towns Scheme, which is backed by the Conservatives, Labour and The Lib Dems.
Jeremy Hunt has also made a play for younger voters, instead focusing on Generation Rent. If elected, he has promised to deliver 1.5 million homes for renters in the next 10 years. It’s easy to imagine that a large majority of those homes will come under the BTR guise.
Jeremy Hunt’s words might be music to the ears of developers, especially if there are construction discounts to vie for in the future. But, whoever becomes the next prime minister is likely to back the build to rent model as one of the ways to help the shortage of homes in the UK.
With more than 140,000 BTRt units either built or planned, those looking for a home are likely to have more options – which can only be good news. With flexible tenancies and a focus on community, developers are thinking about more than merely providing bricks and mortar.
Options for homes should increase with BTR, modular homes, private landlords, and traditional new builds constructed for sale. The result will hopefully be the first wave of homes that begin tackling the housing crisis – whether it’s Boris Johnson or Jeremy Hunt leading the charge.
© Treex 2020