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Gov. urged to concentrate on rented property

Monday, 16 June 2008 12:51 AM

The government has been focusing resources in the wrong sectors of the market in its push to address the nation's housing crisis, according to think tank Centre for Cities (CFC).

While attention has been lavished on the idea of home ownership for all, not enough emphasis has been placed on driving up the number - and standards - of homes for rent to meet growing demand.

A report from the Department for Communities and Local Government committee (CLGC) recently illustrated the need for some 50,000 new rental properties annually in order to meet demand.

The CFC argues in the present economic climate, it is becoming clear home ownership - either fully-owned, or via shared equity schemes, such as the Open Market Homebuy scheme - can put financially vulnerable people at risk of repossession.

Meanwhile your average would-be first-time buyer is finding it increasingly difficult to find good quality, affordable homes to rent.

"The government is focusing too much on home ownership, and not enough on homes for rent," said Dermot Finch, director of the Centre for Cities.

"Demand for rented housing is increasing all the time - but supply isn't keeping up. Unless this changes, the young and job movers will have difficulties finding somewhere decent to live."

In response the think tank urges Caroline Flint - the minister for planning and housing - to encourage institutional investment in high-quality, private-rented housing.

This will help deliver the government's ambitious target of three million new homes by 2020 - and give young people better housing choices, before they are ready to buy, argues CFC.

By 2021 it is estimated that the UK could have just over three million renters - 600,000 more than in 2001, according to research from analysts Hometrack.

At current rates of house building, by 2021 at least one in five new houses will need to be homes for rent to meet demand. However, the figure presently stands at 12 per cent.

This compares to Switzerland and Germany where two thirds and a half of all households rent respectively.

Commenting on the findings, Mark Allan, chief executive of Unite Group said: "For the private rented sector to become recognised as a serious player within the housing agenda, the sector needs to break out of its existing mould and learn from other customer facing businesses.

"The sector needs to focus on delivering a product and service that is geared and marketed to their customers needs.

"Being customer focused and demand driven is a precursor to attracting institutional investment, one of the primary opportunities for future growth," he concluded.

Chris O'Toole

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