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It has taken a while for the penny to drop about the build-to-rent industry, but it is now clear that this will become the 21st century, privately-funded institutional successor to council housing.

The seismic shift in the housing market that will result should not be under-estimated. What we are seeing is the start of a large structural change.

Instead of the large council housing estates built post-war, there will be whole developments where homes are built for private tenants.

Instead of clusters of affordable homes on modern housing schemes – which in practice, have done much to make those properties being sold in the open market unaffordable – we will see homes built for private rent.

An industry has seldom got off the ground so quickly. It was only last August that the Montague Report focused on the feasibility of developers building homes for private rental, backed by institutional investment.

The report’s recommendations were quickly accepted by the Government, which equally quickly put them into practice.

We are now seeing the first developer – Persimmon – outline its plans, while social housing groups are also moving rapidly into the sector.

If, as is envisaged, the build-to-rent sector delivers 10,000 new homes in the first phase alone, then it would be understandable for the traditional, largely cottage-style industry of traditional private landlords and letting agents to feel threatened.

In fact, as the housing minister Mark Prisk has made clear, there will be room for all types of operation: the object, albeit in untested waters, is to grow the entire private rental sector.

However, there are some likely consequences: just as council houses were (and are) cheaper to rent, it is likely that the new breed of built-to-rent homes will be highly competitive.

A larger supply of rental homes will almost certainly bring rents down generally – so it is interesting that of the first 45 build-to-rent projects, one quarter will be in London, where affordability for tenants has become a serious issue.

The quality of built-to-rent homes will also be of a standard that could raise the bar generally – which can be no bad thing.

Good private landlords will still find their properties much in demand, and for good letting agents the prospects are tantalising. Those who have built up strong reputations for property management are likely to have the opportunity to win some very significant new business.

When the Prudential recently announced it was going into the build-to-rent sector with the acquisition of over 500 units from Berkeley Homes, due to be finished this June, it was also announced that Savills would be managing the portfolio.

Mark Prisk – who incidentally, was described by Countrywide boss Grenville Turner as that rarity, a housing minister who actually understands housing – is right to warn that there will be obstacles ahead for this new build-to-rent sector.

One hopes that it will not be the Government itself coming up with those obstacles (the Help to Buy scheme, with its 95% mortgages available from next January, could be a significant hurdle if ministers stumble over the detail).

Nevertheless, it is not often that one can see such a radical shift happening before our eyes. This is just such a moment.