13th
Sep 2013
Is it good news to hear that the Government is inviting bids from property developers for its second round of funding to increase the numbers of new rent-to-buy properties.?
Earlier this year in July, Crest Nicholson received a 7.5 million subsidy for part of its £500 million development of the Centenary Quay in Southampton from the first Build to Rent fund. For the subsidy they had to make 102 out of the 1,600 new homes being built to be made available for private renters.
In the second round of the funding, the Government is making available £400 million from the public purse for tenders to make sure that developers will support the private rental sector.
- Mark Prisk, the Housing Minister, emphasised the government’s commitment in offering greater flexibility and a wider choice for those who rent privately. He stated that bids would only be considered by the Build to Rent fund if they included plans to offer longer term tenancies within a mix of accommodation under the scheme.
Submissions of interest must include core information within their proposals and information is available from the HCA (Home and Communities Agency) website
- The Chairman of the government's private rented sector 'taskforce', Andrew Stanford, said: “There is considerable momentum building in the new private rented sector. The second round of Build to Rent funding will be a further significant boost to kick-starting the sector.”
HCA chief executive Andy Rose said: “The private rented sector has a key role to play in increasing the supply of new homes. There was strong appetite the first time round and we are looking forward to seeing an even higher level of interest and quality of proposition this time
PIMS Comment
This could be argued to over dressing PR – Developers are already obliged to make a proportion of the development available to Social Housing Providers and many landlords will acquire from this development properties for their portfolios. If they really want to reward and incentivise investment in the private sector then provide Landlords with roll over tax relief, reintroduce void period Council Tax and reduction in stamp duty where property bought as rental investment.
In conclusion 102 homes out of 1600 available for private rental - well national averages would imply 15% would be private rented meaning 240, This is not really a subsidy but indeed a loan
The Fund is a fully recoverable, commercial investment where Government will share risk or bridge finance to allow schemes to be built, managed and let. The investment could be used to cover development costs such as land, construction or management costs
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