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Housing associations have 'key role' in subsidy free rental model

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Housing associations have 'key role' in subsidy free rental model

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Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Housing associations have 'key role' in subsidy free rental model Housing associations have 'key role' in subsidy free rental model

Housing associations have a key role in a new build-to-let development model that would require no state subsidy, a new report has found.

The report - published today by housing research charity BSHF - outlines a new model to support the development of ‘build-to-let’ and suggests that this new approach can contribute to ensuring that households have access to decent housing.  It suggests:

  • investment-ready portfolios of a suitable scale would demonstrate the potential of the residential sector to institutional investors;
  • the investment to build new homes for rent would help to meet housing need and demand, in terms of both quantity and quality.

The report says some of the developing housing associations have stock of a scale that could attract external investment, for example from pension funds.  Some housing associations, it says, already engage in market activity, including private rental; this model, it says, would further that activity in terms of the scale of development and the role of investing funds.

Building New Homes for Rent’ presents the conclusions of an event co-ordinated by BSHF, which brought together experts including housing providers, investors, academics and representatives of central and local government to discuss new ideas and develop a strategic approach.

David Montague, group chief executive of L&Q, who took part in the event said: “What is different about this proposal is the potential impact that the scale of development could have if it was taken forward by several Associations and if the funding from the investment sector is forthcoming.  At L&Q we are already exploring a similar model, having recently committed £250 million from our reserves to ‘kick start’ the development of our private rented housing stock with a view to then getting financial backing from institutional investors. I look forward to seeing this model moving into the next stage of development.”

Jim Vine, the head of programme (UK Housing Policy and Practice) at BSHF, said: “While purpose-built rental homes are unlikely to be the sole answer to the UK’s housing supply problems, their delivery would offer a variety of advantages: providing greater choice for tenants in the market rented sector and, through competition, encouraging higher standards in the sector overall.”

As a next step Lord Richard Best will be chairing a roundtable event in the House of Lords on 19 November, which will be attended by representatives of the housing and investment sectors and facilitated by BSHF, at which the practical steps needed to take forward the development of the model will be discussed.

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