If there is any chance of the Government reaching its housing targets, developers and local councils must work together to bring the private rented sector outside of its city centre strongholds, said leading industry figures at Place North West and Placefirst’s Housing the Forgotten Majority conference.
See below for video, gallery + slides
A packed room at Manchester’s Museum of Science & Industry heard from speakers including:
- Caroline Baker, partner, development and planning, Cushman & Wakefield
- Paul Beardmore, director of housing, Manchester City Council
- Thomas Brown, regeneration manager, Lancaster City Council
- Anthony Breach, analyst, Centre for Cities
- Suzanne Benson, partner, real estate, Trowers & Hamlins
- Michael Cunniff, architect, Jeffrey Bell Architects
- Cllr Frank Hont, cabinet member for housing, Liverpool City Council
- Steve Modric, strategy manager, Homes & Communities Agency
- David Smith-Milne, managing director, Placefirst
- Heath Thomas, head of real estate finance, North West, NatWest
The event opened with a presentation by Baker, who outlined how the private rented market had changed dramatically in the last 15 years.
- In 2002, PRS was seen as low-quality accommodation run by rogue landlords, but in the last 15 years the image of the sector has transformed to be associated with city centre high-rise buildings with young professionals as its target market
- The last five years have seen the rise of suburban PRS: predominantly low-rise homes targeted at families and retirees
- This has led to a much more varied private rented sector in the suburbs with more developers and councils looking at the model to invest in areas in need of regeneration
- Institutions and registered providers are “only just starting to get their heads around” how suburban PRS works and the opportunities it can provide
- RPs in particular can use the sector to broaden their housing offering, and developers should not worry suburban PRS is “a flash in the pan”, with the model already very common in Europe
Baker’s presentation was followed by analysis from Anthony Breach of Centre for Cities, who outlined how changing demographics in cities and suburbs will drive demand for both housing and land across the UK.
- In Manchester, two-thirds of the city’s growth has been from graduates moving back into the city, with the remainder students. Liverpool has a split of around 50/50, and Sheffield has a two-thirds split towards students
- Manchester has “reaped the benefits” as a result, with more productive and economically active young people returning to the city
- There is an “increasing economic and political divide between improving cities and those that have been left behind”
- Cities need to look at suburban PRS schemes as a way of increasing density, and reducing pressure on green belt land and countryside sprawl
- It can also play a role in replacing and replenishing poor housing stock in city centres; examples including terraced homes and former council-owned estates
Location is key
Breach and Baker then both joined a panel chaired by Place North West editor Jessica Middleton-Pugh, alongside fellow panellists Paul Beardmore, director of housing at Manchester City Council; Suzanne Benson, real estate partner at Trowers & Hamlins; and Steve Modric, strategy manager at the Homes & Communities Agency.
- Beardmore admitted there was “a perception among local councils that PRS is bad” with many examples of poor quality, mismanaged properties owned by private landlords in the suburbs
- Baker agreed that the private rented sector in suburban towns was still “a lucky dip whether you got a good landlord or not”, and said there will be “more players out there who deliver quality homes and manage them professionally” as PRS expands outside city centres
- Modric argued “the only way” the Government would hit its housing target would be through diversification, and called on local authorities to make land allocations for suburban rented schemes in their Local Plans
- Benson said longer term leases would be what “differentiates suburban PRS” but warned there was still a “high degree of suspicion” from tenants; providers will need to improve their messaging to make these tenancies a viable option
- Baker added that alongside finding the right providers, location was key: areas where suburban PRS is to flourish need employment opportunities and access to public transport. She cited Warrington as one example of a town where new family PRS opportunities were beginning to emerge
- Beardmore argued that it was “easy to say we should use green belt but incredibly difficult to do it,” and said the PRS market would need to fit into regional town centres as part of a “placemaking” initiative
Government’s “lazy” approach
Placefirst managing director David Smith-Milne gave a passionate argument for the emerging suburban private rented sector and its role in housing people and “turning around neighbourhoods that have failed”.
- Growth in the sector has been because it has absorbed demand from social renters, who are often left with a choice between a long social housing waiting list or poor-quality privately-rented homes
- He argued “billions of pounds of Government money” had gone towards city centre PRS tower blocks which was a “lazy” approach to solving the housing crisis
- Placefirst has invested in “unloved neighbourhoods” to revitalise derelict properties in Liverpool at Welsh Streets and Morecambe with its West End project, and Smith-Milne argued this was often a better approach than knocking buildings down and starting again
- “Creating a sense of community” is key to getting suburban PRS to work; providers should not look at “doing the bare minimum of neighbourhood management” but need to be “fastidious” in their approach to tenants
- He also argued that outsourcing repair and maintenance work can “go horribly wrong” as firms were looking to “create profit where profit doesn’t exist”. This has led to Placefirst bringing services in-house and he encouraged other operators to do the same
Michael Cunniff of Jeffrey Bell Architects then outlined a suburban PRS scheme that his firm had been working with Placefirst on. The project, on a brownfield site just outside one of Greater Manchester’s regional centres, will be targeted at families and mixed generations, which Cunniff argued was becoming “a real alternative” to owner-occupier homes in Manchester’s suburban towns and elsewhere. “There are countless sites like this that present an opportunity for developers,” he said.
Cunniff and Smith-Milne joined a panel alongside Thomas Brown, regeneration manager at Lancaster City Council; Cllr Frank Hont, cabinet member for housing at Liverpool City Council; and Heath Thomas, head of real estate finance, North West, at NatWest, to discuss the take-up of suburban PRS across the North West.
- Brown said traditionally there had been “no demand for family rent in Lancaster because nobody was offering it”, despite the fact that the council had around 29% private rented households in its stock
- “In low-demand areas with low-value, nobody wants to come and play,” he said, praising Placefirst’s approach to regenerating West End. Placefirst has started on the second phase which will see the refurbishment and remodelling of 23 former guesthouses into family homes
- “To make the model work you need a level of stewardship; normal developers can just come in, build something, then leave,” added Brown
- In Liverpool, the situation is radically different, as Hont outlined. He said there are more than 8,000 private landlords in the city but few are based in Liverpool or even in the UK, while he criticised letting agents for not doing enough for tenants
- Hont said his council was “not having great success” at trying to convince the Government to address different housing needs in Liverpool and added “devolution could be one answer” to offer more housing and alternative tenures in the city
- From a funding perspective, Thomas said investment in suburban PRS required “some faith from banks” to back. Banks were currently “falling over themselves” to fund city centre PRS schemes, but the loan-to-cost ratio for suburban schemes was actually very similar
- “At the moment the big shiny buildings are easier to fund because they’re in prime sites and have more affluent people willing to take up the units,” he added
- Smith-Milne highlighted the role of local authorities and councils at helping make surburban PRS viable, and called for councils to work on land assembly and compulsory purchase orders to help get difficult-to-develop sites on the market
- “We couldn’t have done anything we did on Welsh Streets without somebody assembling it for us,” he said
- There was also an opportunity to build more rented homes for retirees across the region, with “a total absence” of affordable, non-socially-rented properties available in the market, but giving people “trust in the landlord and certainty of tenancy” was key to making it work
- Cunniff added that controlling construction costs would be one of the keys to making the sector work, and called on design teams, developers, and contractors to work together to make the model “as efficient as possible”
Watch the highlights from the conference below:
The slides from the presentations are available using the following links:
Click any image below to launch gallery