The proposals are for an additional 5,000 homes built for rent at market rates in line with Sir Adrian Montague's report on boosting the private rented sector (PRS), with the government to invest £200m in housing sites to ensure that the high-quality rented homes needed are available to institutional investors quickly.
So far so good. As a nascent developer firmly in the regeneration space, but with a strong element of PRS in the model, UKR has submitted an expression of interest, as invited. We now wait to see what transpires.
And the UK does need the Montague recommendations to take. If you've been following anything in the property press over the past few years, you will be aware that there has been nothing short of an all-out campaign for the development of a private rent model for the UK market.
The great blueprint is always the American "multi-family housing" model (in reality not really catering much for families, but hey!) and it is to the US that most of us turn to gain a better understanding of the operational, management, and financial requirements of the PRS and the resulting implications on design. And we do badly need to diversify our housing stock. This campaign is not merely the work of a bunch of self-interested would-be providers (although there is a bit of that, of course) but is a real response to the tectonic plates shifting under the housing market.
And housing shortages are pretty stark out there. Rightmove recently reported that rents are seriously "over-heating" in London and the South East, where 60% of tenants expect to be paying higher rents in 12 months' time. "Serial landlords" (currently the only bigger players in the PRS space) are far more prevalent in the North East, North West, Scotland and Wales (average returns are typically above 6% in favoured northern regions). Down south, where demand is highest for homes of course, high capital values limit portfolio expansion plans from experienced investors. Yields in London and the South East typically fall below 6%, and therefore below what an institutional investor could fund.
And this is about as robust a picture as we can get, so we can't interrogate what is going on at too fine a grain. On Friday the BPF reported that a UK Statistics Authority review of housing market data has found that there is "an absence of reliable data on the private rented sector, and recommended this should be filled". The BPF supports the recommendation by the national statistician's review to establish a private rented index, to help policy makers understand the impact of their policies.
The review also calls for housing market statistics to be made more accessible. The BPF are staying close to developments being led by the Office for National Statistics, and will be applying their usual persuasive techniques.
In UKR we are bullish. Perhaps even a little gung-ho! (Well we're dangerously optimistic by nature). And not just because we are entering this market and have done a shedload of research behind our investment. Our confidence is more in response to economic forces, and our sense that things have to change, and change fundamentally and significantly.
So we were simply thrilled to learn that Stephen Stringer, known well to UKR and to most regeneration practitioners in his role as deputy director, Olympics and legacy at the Department for Communities and Local Government, is to take up post almost immediately to implement the Montague Commission report.
This is simply splendid, simply fantastic, simply brilliant news. Stephen knows his stuff alright, he'll sort out the base statistics in a twinkling, and he knows who he can trust to get things done on the ground. He is truly the right man for the job. And it will send out a very robust and encouraging signal to the market. Mr Stringer is an excellent appointment, he is a true regeneration practitioner, and we look forward to working with him to bring about effective and sustainable change in our towns and cities.