Boris Johnson’s draft Supplementary Planning Guidance (SPG) for housing in London has gone down well with the British Property Federation (BPF) for its reiteration of the role that the build-to-rent sector can play in delivering new homes.
The document is out for public consultation until 7 August, but the BPF has singled out for favour the focus on the suggestion that land use and planning could be used to promote the growth of long-term private rented sector products.
As the passage the BPF cites: “Positive support should be given for long term private rented products through the land use planning system at local as well as strategic level eg recognising in Local Plans how the private rented sector can address distinct needs; be particularly suitable for certain locations (for example town centre intensification and transport nodes); as well as through development management.”
The BPF has welcomed the focus on how this might affect local authorities, and in particular the suggestion that a covenant can be used to secure developments as rented for a defined period, and to take account of the different viability of the sector in public land deals and s106 negotiations.
A further suggestion in the guidance that proved welcome with the BPF was that to protect local authorities’ positions, should the owner seek to sell the units instead of renting them, local authorities should also consider clawback agreements that provide for the contribution amount on the level of affordable housing that would have been viable on the scheme if it was for traditional market sale.
The BPF said it also supports developers and boroughs considering including discounted market rent (intermediate rent) as the affordable offer.
“The Mayor is at the forefront of recognising the contribution that build-to-rent can make to the quantity and quality of rented homes in London. It is welcome that the Mayor is thinking about what meeting his build-to-rent target means in practice for local authorities and the evolving sector,” said Ian Fletcher, director of policy (real estate) at the BPF.
“Institutional investors like clarity, and this draft SPG provides further guidance across a range of issues, recognising the distinct economics of the sector, and what developers and local authorities can do and expect.”
The Mayor of London, Boris Johnson MP, said: “Providing a choice of decent homes at prices Londoners can afford is arguably the greatest challenge facing the capital today,” said Johnson. “To keep pace with rapid population growth, we must massively increase the number of new homes being built. My 2015 London Plan responds to this challenge by planning to deliver at least 49,000 extra homes a year.
“Drawing on my new London Plan this draft SPG seeks to encourage all the players in the housing market to think innovatively about how different housing models such as purpose built long term private rent and the range of intermediate housing options can meet need and accelerate delivery.”