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RESI Conference 2017 :: RESI Round Up Day 1
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RESI round up - Tuesday 13th September

 

Major boost for Build to Rent at RESI 2016

Housing has often been described as a political football, but at this year’s RESI conference it could be better described as political netball, with the ball landing firmly in the Build to Rent camp.

Savills UK residential research director Lucian Cook pointed out in the past ten years there have been enough housing ministers to form a netball team with two substitutes – and ribbed his university contemporary and current housing minister Gavin Barwell for his supposed love of the sport, a claim the Croydon Central MP would later blame on Cook’s love of ‘data manipulation’.

The Savills research chief’s presentation was the usual tour de force of graphs and statistics that laid bare the scale of the affordability crisis.  Coming hot on the heels of economist Dame Frances Cairncross’s opening speech, which revealed how little room for manoeuvre the government has to stimulate the economy post-Brexit, there was plenty for delegates to mull over.

What came next (pleasantly) surprised everyone. In his first major speech as housing minister, Gavin Barwell declared “we need to build more homes of every single type and not focus on one single tenure”, signalling a firm shift away from the Cameron-Osborne obsession with homeownership.

Barwell acknowledged the country’s housing ambitions would “never be achieved” without a significant boost for institutional investment in the private rented sector, adding, “recent growth in the bespoke rental market has been impressive but this progress must be expanded.”

Commenting on the previous government’s pledge to build 200,000 Starter Homes, the minister hinted at a change of course. “It’s obviously a manifesto commitment that we have, what I’ve got to look at is can we have a wider range of products in terms of affordable housing”, he said, while admitting “there’s a little bit of a tension between the overall supply objective and measures specifically to help people onto the housing ladder”.

The recognition we needed to broaden the base of supply was a key theme of the session with James Murray, London’s deputy mayor for housing. Speaking with host Mark Easton, BBC home affairs editor, Murray said, “volume house builders need to work alongside new forms of delivery, like build to rent”, adding, “if we’re going to increase supply and have affordable within that, you need to use every route of delivery.”

Defending his long-term affordable homes target of 50 per cent, the deputy mayor said a key consideration was “how we fit affordable housing into the build to rent sector” but recognised discount market rent could be a “good way”.

Planning reform was another priority for Murray, who called for the system to be “clearer, quicker and more consistent” with clearer guidance for councils on build to rent.

Robert Evans, partner at Argent, saw this as a key issue in the earlier London Conundrum panel, stating, “How you translate affordable to build to rent needs to be clarified by the mayor for local authorities.” Bruce Ritchie, founder of Residential Land, said discount market rent could be an “acceptable affordable housing equivalent” but ministers need to get behind it.

The rise and rise of build to rent has created opportunities for another burgeoning sector – modular housing – with Paul Stanworth, managing director of Legal & General Capital, saying, “we learnt from student accommodation that a rental model needs speed for the finances” leading them to take a modular approach to private rented housing.

Taking a wider look at the residential market, Tom Bloxham, chairman of regeneration specialists Urban Splash, envisaged modular being 70 to 80 per cent of his business in the future, while Berkeley’s Tony Pidgley said modular could form 20 per cent of the group’s pipeline. Mark Farmer, CEO of Cast, warned the disruption modular would bring to the construction was necessary if the industry was to survive.

The theme of disruption continued throughout the afternoon, with Silk Road managing director James Fenner outlining a new way of living, while Gerard Greene, co-founder of Yotel and chief executive of Society, urged the rental market to be more like Uber before it was ‘kodaked’.

The final panel of the day – the Game Changers – gave a hint of what the future of the property industry might look like, with those at the cutting edge outlining the way forward.

Join in on the conversation from RESI 2016 on Twitter @RESIevent #RESI2016

 

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