What are we going to do about Generation Rent? Only as recently as February 2016 did tenants steal the headline away from home owners, with the number of private renters in the capital surpassing mortgaged buyers for the first time in more than 10 years.
Back in 2003/04, 405,000 households in London were living in privately rented accommodation, according to data from the Government’s English Housing Survey.
Today, that number stands at 898,000.
Not surprisingly a solution to the lack of quality rental accommodation is being sought. Build to Rent is the buzz phrase for 2016 and moving forwards, with a swell of land released and global investment promising thousands of new homes exclusively for private rent.
But demand is in the here and now, as well as in the long term. The lack of a skilled workforce, residual red tape and just the sheer time scale of getting a site from a glossy CGI to a habitable scheme aren’t going to solve the immediate problem.
But is the solution already in existence?
The focus is shifting to empty properties houses that are already built. Data received from London boroughs in response to a freedom of information request and published in The Guardian revealed 22,000 homes in London have been left empty by their owners for in excess of six months.
More alarmingly, a third of the total – 8,561 – have been left uninhabited for over two years, with 1,151 empty for more than a decade.
Despite this waste of space, it remains doubtful that property owners will be forced to either inhabit their own homes or hand them over to the private rental sector.
The spotlight, instead, has shifted to the commercial sector, where there has been a call to allow disused commercial land and buildings in London to be redeveloped and subsequent distribution in the burgeoning private rented and shared ownership sectors.
Figures compiled by Policy Exchange found there were more than 500 hectares of empty or under-utilised industrial land across London alone, which could provide up to 420,000 additional homes for the capital by 2036.
The Government, however, would need to commit £3.1 billion a year to finance the purchase of land and a private sector partner would need to be secured, but this offers some light at the end of the tunnel – especially since it is estimated that rental income from the homes and the sale of equity stakes could allow the government to recoup its money within 20 years.
Hang on, wouldn’t that make the Government part of the Build to Rent phenomenon?
One thing is clear, there is a dramatic push to increase the number of homes in the private rented sector.
Many of the initiatives are on a wholesale scale, complementing (or some would say dwarfing) the current private landlord-based activity.
As agents and property managers, our professional lives are set to be anything but empty.
*Simon Duce is the Managing Director of ARPM Outsourced Lettings Support