Ministers need to wake up to ‘us renting’

The UK needs an American style ‘professional’ rental sector, claims the BPF…

A professional rented sector is where large property managers run domestic lets in a similar fashion to offices, with professional management and economies of scale enabling longer-term lets and a greater level of confidence from consumers.

Policy makers have long ignored the professional rented sector as a serious solution to the housing crisis, focusing instead on building more homes to buy. But with mortgage lenders more reticent to lend, there is no credit for people to buy.

And with a million more are now at risk of repossession over the next 18 months, according to the FSA, a workable alternative to ownership is desperately sought. Even if 240,000 new homes were built this year, it is unlikely that 240,000 people could afford them, as the affordability gap remains.

Viable alternative ownership

The fall in mortgage lending and rise in repossessions has created even greater demand for rented accommodation, which has risen 25% above ownership since 2000. House builders meanwhile, have struggled to maintain output, let alone increase it in line with Government targets of 240,000 per annum.

Rupert Dickinson, chairman of the BPF’s residential committee and chief executive of Grainger Plc, said: “Ministers need to wake up to the reality that no matter how many new homes we build, there will continue to be a huge affordability gap between what people earn and can afford to spend on a house.

“Institutions can provide the long-term tenancies and levels of service that tenants benefit from abroad, and it’s time that we took the professional rented sector seriously as a viable alternative to ownership.”