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Housing Watch: Building for Generation Rent

As the UK’s private rental sector becomes increasingly significant, there are a number of opportunities present for astute brokers

Research from the Resolution Foundation reveals that up to a third of young adults in Britain will never become homeowners. Figures such as this show exactly why the concept of Generation Rent has materialised in recent years. But is it a bad thing?

Headlines relating to this demographic make it sound like they are trapped, with no pathways into homeownership. There are, of course, a number of solutions to make it easier for these people to get onto the ladder: schemes like Help to Buy and shared ownership.

But the truth is that homeownership is not for everyone – and it shouldn’t be.

For those who do not want to commit to buying a property – whether due to personal circumstances, their career, finances or because they want more flexibility – it is wrong to assume that doing so is the right path.

As an industry, we need to think about how we can change this perception and come up with more creative ways to help this group keep a roof over their heads.

While the Government has been pushing to build the 300,000 new homes per year needed to close the gap between supply and demand, there is still a long way to go. Indeed, with house prices rising, property transactions remaining static, and the population expanding, the UK’s housing crisis is not going away any time soon.

Build to rent

The private rental sector is becoming increasingly important in the UK housing landscape. At the beginning of this year, the English Housing Survey revealed the sector now accounts for a fifth of all households.

However, following the stamp duty surcharge introduced in 2016 and the regulatory changes to portfolio landlords in September, the buy-to-let market has taken a serious hit.

With buy-to-let mortgage approvals down 8.8 per cent year-on-year, and over half of buy-to-let investors now considering selling their portfolios, many will be watching to see how the changes will pan out.

So, what will become of their tenants? We need to start thinking about how to make rented accommodation a viable long-term form of tenure. One way of doing this is by encouraging investment and support in buildings specifically for this purpose: build-to-rent.

The UK’s housing crisis is not going away any time soon

Over the past few years, investment in build-to-rent has grown. A report from the British Property Federation, Savills and LSE, estimates build-to-rent will create almost 250,000 rental homes by 2030.

Purpose-built apartment blocks are already a common sight in countries such as Germany and France. With our lack of supply and ageing demographic, there is even more need for homes specifically designed for renting and appropriate for different age groups, from young professionals to retirees.

Build-to-rent properties are already improving standards across the market. They also give renters the freedom of choice: tenants can often bring pets and benefit from the security of longer or more flexible tenancies. The East Village and Wembley Park – the biggest build-to-rent sites in the UK – currently offer tenancies of three years or more.

That said, build-to-rent needs more support and investment. London mayor Sadiq Khan has announced he wants to build 5,000 build-to-rent properties in the capital but, at the moment, investment is only limited to collective investment, not singular bodies.

The government has already identified build-to-rent as a way of boosting supply, but we need to see the scheme opened up to local councils, authorities and developers. When we consider that schemes like Help to Buy have not been guaranteed post-2021, we need to find other options for builders and authorities.


There is clearly an opportunity here for brokers too. Buying a property is a common milestone to prompt clients to take out protection but that does not mean renters should not consider it too. It is just as crucial.

If a tenant became seriously ill and unable to work, all other parties signed within the assured shorthold tenancy agreement would be liable to pay the outstanding rent. For a family, the financial impact on budgets could mean difficulties paying other bills.

The government has already made a move in the right direction by looking at proposals to change regulation for councils to proactively plan for more affordable rental homes. But more needs to be done. We need to see build-to-rent become as frequent a form of building as the homes the country constructs for owner-occupiers if we are to ease our current housing crisis.

Attitudes and aspirations towards homeownership are changing and the industry needs to seize these opportunities as they arise.

Craig Hall is new build manager at Legal & General Mortgage Club



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