Sarah Reardon
Posted on 24 Apr 2017

Build to Rent policy changes – implications for developers and local authorities

A few weeks ago the Government released a White Paper on housing in which the private rental sector played a large part in future plans.

The Government is currently proposing a variety of measures aimed at encouraging the Build to Rent Sector. These include making it easier for developers to offer cheap private rented homes and allowing local authorities to proactively plan for Build to Rent Schemes.

The proposal is to amend the National Planning Policy Framework to support an increase in the number of new Build to Rent homes and the provision of an affordable housing class called 'Affordable Private Rent' as the main form of affordable housing provision on Build to Rent schemes. It is suggested that developers will be required to provide at least 20% of new home developments at a 20% discount on three year tenancies and that developers would agree eligible income bands with the local council. It is proposed that in return for this developers will receive better planning assurances.

There is, however, some flexibility in the proposal that is likely to allow developers to negotiate to provide different alternative housing products or on different terms with local planning authorities.

The proposals are currently undergoing consultation, with the period of consultation closing on 1 May 2017.

Implications for local authorities

Some authorities are already supporting Build to Rent initiatives – and with the proposals these authorities will now have the policy framework to improve delivery.

Other authorities that are not so familiar with Build to Rent now have the opportunity to use the consultation to engage with it.

One thing that is clear is that increased certainty on what constitutes Build to Rent and Affordable Private Rent will be a step in the right direction for all.

A potential issue for local authorities in London, however, is how the proposed changes to the national policy will interact with the Mayor of London's draft supplementary planning guidance on Build to Rent as there are some key differences between the two.

Implications for developers

The proposed amendments to the National Planning Policy Framework would mean we are likely to see a significant increase in the number of Build to Rent planning permissions being granted.

Again the new proposed changes will also provide more certainty for developers.

A key difference between Affordable Private Rent and other affordable housing is that rather than requiring units to be fixed in certain parts of the building Affordable Private Rent will allow developers to move the units around if required.

As with all changes to planning policy there is a risk to the developer of how local authorities will treat the proposed new amendments in making decisions.

If you would like to find out more about any of the proposed changes and how this is likely to impact on you, or if have any other planning queries, please contact Sarah Reardon at Michelmores: sarah.reardon@michelmores.com