The Build To Rent initiative - whereby financial and other institutions bank-roll the building of blocks of apartments and then keep ownership and manage the letting of individual units - has taken a huge step forward with the unlocking' of £3.5 billion of funding.
A deal between the government and PRS Operations Limited, a subsidiary of Venn Partners LLP, has been signed by housing minister Brandon Lewis.
The government's private rented sector housing guarantee scheme enables landlords of new rented homes to use a government guarantee to secure long-term financing. This is purposely aimed at boosting the supply of purpose built, professionally managed private rental homes - which will, of course, compete with letting agents and buy-to-let landlords who have until now been the backbone of the private rented sector.
This £3.5 billion in government-backed loans will be made available to institutional landlords looking to invest at least £10m for new homes available for private rent.
Venn Partners has created PRS Operations Ltd specifically for the Build To Rent initiative.
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Comments
Daniel I too think they are a positive step and I did fail to mention that some developments in my City have been a success but, as you say, they need to be managed professionally.
Not so sure about this. My experience of these new apartments blocks has been very different, with none of the anti-social problems you cite. I think the picture you paint is a bit too negative. I appreciate that you're speaking from personal experience, but I think these schemes can work when carried out correctly and managed professionally.
This build to rent issue worries me. In my city there have been various apartment blocks developed by institutional investors, rented out and managed by what must be poor quality letting agents who save the investors a buck or two on management fees and who seem to scrimp on Tenant selection. Most apartment blocks suffer from terrible anti-social behaviour of poor quality tenants.
Indeed, we have had many Tenants who lived in such places come to us to rent alternative accommodation and talk of drug use, litter and fights in communal areas.
I visited one particular block about 2 years ago and it was appalling even though it was only 3 years old. The apartments in question are above shops in a square. Along one side of the square are a number of large 3 and 4 bed town-houses which face the apartments. They are now almost impossible to sell due to the amount of ASB even though the Police were urged to implement a dispersal order in the area by local residents.
I just hope that, once built, these build to rent properties will be occupied by decent Tenants carefully chosen by the managing agent and not just filled quickly to save money.