Report tackles shortage of rented homes

| August 23, 2012 | 0 Comments
Report tackles shortage of rented homes

With soaring demand for accommodation pushing rents to an all-time high, a new report suggests that rules on affordable homes should be relaxed to encourage the building of homes for rent.

The average rent paid by private tenants in England and Wales reached £725 a month in July according to property group LSL.

The government commissioned report by Sir Adrian Montague, the chairman of private equity firm 3i, says that the UK private rental sector must grow in order to tackle the current housing shortage in the UK.

Controversially, it suggests that developers who build homes for rent should be freed from their obligation to provide a proportion of affordable homes as part of the development.

The suggestion has been criticised by Labour, which says it is “not convinced” that the answer to the housing shortage is to “water down” rules on affordable housing.

Currently developments of 15 properties or more must include a certain element of affordable homes.

Lord Whitty, chairman of the Housing Voice pressure group, said: “It’s highly desirable to get more private rented accommodation being invested in by large scale investors.

“However, if the price of doing that is to end the obligation on developers to provide affordable accommodation, then it will have a negative effect on the prospects of lower and middle income groups.”

Other recommendations in the report include requiring councils to review stalled developments to assess if some of the homes originally planned could be built as rental properties rather than for sale, and making redundant public sector land available for house building.

Housing minister Grant Shapps said: “We’re determined to encourage greater investment in the build-to-let market and boost the country’s private rented sector, which plays an integral role in meeting the nation’s housing needs and aspirations.

“A major part of this is to attract and encourage new players to the market, while at the same time avoiding the excessive regulation that would force up rents and reduce choice for tenants.”

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