And, ever the optimist, I was rather hoping for Sir Adrian to produce a magic wand...
No such luck. I've now looked at the report and I'm a bit, well, underwhelmed would be the word I guess. All Sir Adrian's findings had already been heavily trailed of course. And the tone of the report is somewhat supplicant.
Chris Brown in his blog described it as reading "like a lobbying document for the handful of enthusiasts for institutional investment in residential who have been campaigning tirelessly (and somewhat self interestedly) for many years." And, rather more damning: "Its recommendations stay well within the bounds of what is judged to be politically acceptable (not least within the Treasury) and certainly don't amount to a prescription for the urgent step change in housing output that many believe the economy needs."
And I just can't argue with that really.
UKR gave evidence to the Montague Commission of course, and our position is fairly well documented. So we would join with the property establishment in broadly welcoming the report, largely because we need "something, anything" (as Todd Rundgren would have had it) and, even if it is a little like grasping at straws, we believe that Sir Adrian's heart is in the right (local) place, as indeed we pointed out in our evidence. Local authorities are playing a key role in this area; not only are they a central cog in the process in their role as planning authorities, but many are generally supportive of private rented schemes and some are pursuing schemes of their own.
On the upside, Dr Evans also points out that the report is "commendably brief". Which made me smile.
But we find it worrying that the report persists in attempting to address (what the commission continually describes) as "a case of market failure" despite the fact that UKR (and we are, after all, operating in this market) in our own evidence, both written and verbal, was at great pains to make it clear that we thought government intervention (if that means subsidy) was not the solution. I guess this chimes with what Chris Brown describes as the "lobbying" feel to the report, seeking "somewhat self interestedly" to de-risk the PRS as a model.
We have no argument with Sir Adrian and his team making it clear that the role for government is to signal the importance it attaches to the expansion of the "build to let" market. Nor would we quibble with the report calling for government to reaffirm its commitment to release public land for build to let projects; or to give tangible form to this by encouraging local authorities to make more positive use of existing opportunities under the planning system to promote private rented schemes. No. It is the de facto subsidy proposition that worries us, pure and simple. This is nothing short of large wealthy organisations trying to get the government to underwrite their risk.
As we pointed out to the commission, in no uncertain terms, we are a tiny tiddler in this debate, and in this market, but we intend to enter it without any form of government subsidy by working in partnership with local authorities to populate their localism strategies.
So...we will stand implacably opposed to the government providing any sort of financial support to the sector. We do not believe that government intervention is necessary to lever in additional private capital. We believe that, as with most properly thought-through business innovations "early adopters" will receive commensurate awards. And we believe that risk, and risk management, belongs in the private sector.
It was Milton Friedman who argued that capitalists who seek privileges from the state (rather than compete in a truly free market) are their own worst enemies. Now, who could ever have thought that I would be writing a blog in support of an argument from Milton Friedman?
I would like to say I'm glad to be back. But I'm afraid I would be lying.