The British Property Federation (BPF) has published a new residential manifesto, ‘Building for Generations’ calling on the next Government to take radical action to unlock private capital to address the acute undersupply of affordable homes.
The BPF also called for a clear roadmap for delivering 30,000 Build to Rent homes per year, to ease the pressure on the rental market and support overall housing supply. It calls for interventions such as:
- A stamp duty exemption for new developments of over 100 units to support valuations, de-risk development and create more liquidity in the market.
- A requirement for local authorities to assess the need for professionally rented homes as part of Local Plans.
- Extension of the PRS Housing Guarantee Scheme, allowing Build to Rent developers to raise debt with a Government guarantee to support viability throughout market and economic cycles.
There are now over 100,000 completed Build to Rent homes – and a further 160,000 in the pipeline. However, the UK is still stuck behind its US counterpart, Australia and other countries in delivering professionally managed homes at scale and at a range of price points, according to the BPF.
Affordable housing
It is estimated that 3.7m people are affected by overcrowding and a further 1.2m are on council waiting lists. Housing associations are also reaching borrowing limits, with at least £10bn of institutional capital required to address an acute shortfall in affordable housing, according to the BPF.
To support affordable housing delivery, the BPF is calling on the Government to:
- Increase subsidy levels by £9bn to £14bn, through grants and public sector-supported models. Allied with £10bn of equity funding, this will help deliver 145,000 homes per year.
- Introduce longer term rent settlements to support security of income and viability.
- Review treatment of For-Profit Registered Providers to level the playing field and enable closer collaboration between institutional investors and housing associations
“The only way to tackle the housing emergency is to build more homes of all types and by delivering more affordable housing, market rental homes, student accommodation and older peoples’ housing we can relieve the pressure on overall housing supply.
“However, as it stands development across these sectors is restricted to 35,000 homes a year, when there is a need for at least 100,000. Pension funds and other sources of institutional capital are attracted to these sectors as they offer secure long-term income but the next Government must do more to give them the confidence to invest.
“Currently the planning system at both a national and local level does not provide enough clarity or support for a wide range of tenure-types, and there are several funding mechanisms Government can introduce that will help de-risk schemes and support delivery when economic and market conditions are more challenging.”
Ian Fletcher, Policy Director, British Property Federation
Purpose-built senior housing
With senior housing, there are 602,633 units currently but 12.9m over-65s in the UK, highlighting an undersupply of purpose-built housing for older people, and a burden on the social care system.
The BPF forecasts there is £6.5bn private capital targeting the sector that could support the delivery of 50,000 units per year. To realise this potential, the BPF states that the next Government should create a national strategy for housing an aging population, which encompasses housing, social care and healthcare needs, among others.
PBSA
Alongside Build to Rent, the BPF also identified barriers to delivering purpose-built student accommodation (PBSA). It currently houses 710,000 students and post-graduate researchers – and is favoured by international students.
This is the third of five mini-manifestos on specific areas that the BPF is publishing ahead of the election, alongside its overarching manifesto, ‘Building our Future’ which launched in January 2024.