Montague Review: full reaction

Published by 24publishing for 24dash.com in Housing and also in Development

Sir Adrian Montague's long-awaited review of investment in the private rental market recommends waiving the affordable housing requirements on schemes specifically for private rent.

This, alongside recommendations for councils to ensure homes produced through such agreements remain in the rental sector for up to 21 years, are designed to bring forward new private sector supply funded by institutional investors.

He has also called for a task force to be set up – run by a private sector chief executive – to encourage and support build-to-let development investment from the private sector and to develop voluntary standards that future landlords would meet and tenants could expect.

Housing minister Grant Shapps has welcomed the review adding that the findings offer both a "blueprint" for achieving the Government's goal of increasing the private rented stock and for setting the standards of accommodation that people should expect.

So what do members of the housing sector think?

Catalyst Housing chief executive, Rod Cahill, said: “The housing system is in crisis and we welcome any initiative that can increase the supply of desperately needed homes, in whatever form.

"But, it is a thoroughly bad idea to promote market rent provision instead of, rather than in addition to, affordable new homes –  especially in London."
 
Homelessness charity Shelter’s chief executive, Campbell Robb, said: “With a generation priced out of home ownership, renting is now a way of life in Britain. While we welcome the report’s recognition of the need for more and better quality homes for people to rent, it misses a trick in offering nothing for the millions of people already in the sector, paying sky-high rents and living under constant threat of eviction or further rent rises.  No solutions for our rental market could be complete without measures to address this lack of stability."

The shadow housing minister, Jack Dromey, tweeted: "On Montague, anything that builds more homes is welcome. But there must be affordable homes, homes for all and not just the better off."

National Housing Federation chief executive, David Orr, said: “We absolutely support the Montague report’s call for reform of, and more investment in, private (market) rented housing. It will be a crucial part of the solution to help tackle the country’s desperate housing shortage.

“For generations housing demand has outstripped supply, putting pressure on prices. Market rents have become more and more costly and, with home ownership continuing to be out of reach for millions, it is putting huge financial pressure on the hard working families who have to rent."

In a statement, the Chartered Institute of Housing, said: "CIH supports the report’s recommendation that local authorities should use the flexibilities in the planning system to support the development of private rented homes where that helps to meet local housing need. But it is essential that, as the report suggests, where planning permission for new private rented homes involve developers negotiating a reduced provision of affordable housing there must be clear arrangements to guarantee that homes built remain available for private renting into the longer term.

"In addition CIH strongly urges that this revised approach to planning is trialled for a time limited period. Government can then review the results of the approach before any move to adopt it on a permanent basis. Planning gain has been a very important mechanism for providing new affordable homes and should not be easily discarded."

Home Group deputy chief executive, Joe Docherty, said: “The Montague report rightly recognises that construction of new homes is a major driver of UK economic recovery and that increasing the attractiveness of the rental sector to private investors has the potential to kick-start stalled developments.

 “However, waving section 106 obligations presents a real threat to the future of affordable housing in this country at a time when demand is at its greatest. It is essential that we re-energise house building in the UK but it cannot be at the expense of the people who most need a safe and secure roof over their families’ heads.”

Katja Hall, CBI Chief Policy Director, said: “This review has rightly shone a light on the importance of the private rented sector, and the role it plays in ensuring a healthy housing market.

“Institutional investors must be encouraged into this market, and the Government should consider the range of recommendations to support this, for example unlocking former public sector land.

“But we need to look at the whole picture, and that means getting spades in the ground for all types of housing.

“The Government must continue to explore every available option to boost the housing market, for example the NewBuy scheme, and use its balance sheet innovatively to unlock housing investment.”

Andrew Telfer, CEO of Willmott Dixon's development business Regen, said: “We welcome the report and firmly believe that the development of purpose built and professionally operated private rented homes can be made viable in the UK.

"Unquestionably, planning support is critical in getting these schemes off the ground, for example, the insistence of substantial ‘affordable’ homes within a development can render it unviable.  This is not about moving away from ‘affordable’ housing, but finding new and exciting ways to create homes that allow many more young people to rent affordably. 

"We have no doubt that a strong and growing market exists, particularly amongst young professionals who are likely to remain excluded from owner occupation for the foreseeable future and are not well served by the current private rented sector.  

"We also see a clear appetite in the institutional investment market for the type of secure long term income that private rented housing can provide, and are focussing our efforts on unlocking that potential.”

Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA) commented: "The NLA welcomes Sir Adrian Montague’s recommendation to increase investment in the private-rented sector and the Government’s recognition of the important role played by private landlords.

"At present, we are simply not building enough new homes to meet the demand.  The genuine interest from institutional investors in building to rent is the fastest way to make a significant impact on the shortage of housing."

Bruce Shelmerdine, Finance Director at Chatham based mhs homes in Kent said: “Anything that increases the supply of housing must be welcomed, but it cannot be at the expense of affordable housing.”

The g15 group of London-based housing associations warned the Montague review could put the Mayor's affordable housing programme in the capital at "serious risk".

It welcomed plans to kickstart housebuilding but warned the Government's proposals to encourage greater investment in build-to-let developments could reduce the number of affordable homes being built.

It said prioritising private rented housing over affordable homes would "hit many hard working low-income families hardest" as they are priced out of the market in the capital already.

 Keith Exford, chair of the g15 and chief executive of national affordable housing provider Affinity Sutton, said: “Many of the proposals in this report are sensible, especially speeding up the release of public land. But we fail to see the case for releasing developers from obligations to provide affordable housing in London when house prices and rents are continuing to increase”.

Mr Exford added that ministers should be concerned by the increased benefit costs of greater reliance on the private rented sector. “A shift away from affordable housing to much higher market rents will force more people to seek help through the benefits system with a huge increased cost to the Treasury. In a market so severely constrained by under supply, affordable housing offers far better value to the Exchequer and tenants alike,” he said: