Housing minister Mark Prisk spoke about the massive changes in store for the private rental sector during a speech to the Law Society in London last week, in which he outlined his plans for the government’s new ‘build to rent’ initiative.
During his speech, Mr Prisk outlined the disparity between the opportunities the housing shortage has afforded investors, and the consequences felt socially. He called the housing market 'dysfunctional', claiming that over the majority of the last 20 years, the supply of housing has been around half of what is actually necessary to keep up with demand.
The role of private rental sector has become more important in last ten years. In that time, it has added 1.5 million homes to the market, and now accounts for around 3.8 million properties. Due to both the lack of mortgage availability and increasing mobility in employment, Mr Prisk said, renting is preferably for many. He spoke of the "real potential" to increase the size of sector and bring new institutional investors into it.
He said that in countries like Germany, Switzerland and the US, where investment in the rental sector by experienced institutional landlords is more prevalent than in the UK, the sector is more cost-effective and professionally managed.
“That’s what we want to encourage here. It’s a change which has the potential to underpin sustained growth of the entire private rented sector, and offer beneficial changes to the market as a whole.”
Mark Prisk, Housing Minister
Mr Prisk also announced the creation of a new taskforce, made up of industry experts, to help deliver large-scale build to rent projects and encourage investment in the rented sector.
“We believe that the private rented sector is a vital part of a functioning housing market, and we want it to get bigger and better. A sector in which supply keeps pace with demand, large investors play an increasing role, and government policy is set for the long term.”