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The Association for Rental Living (ARL) has sent an open letter to government calling for “immediate support” to address build-to-rent (BTR) viability issues that continue to deter investment in the sector.
The letter was sent in response to John Lewis Partnership’s (JLP’s) decision to exit the BTR market following a “fundamental shift in the economic conditions”, which ARL chief executive Brendan Geraghty said was “disappointing news and a real loss for consumers”.
ARL members called on the government to provide long-term stability to the sector and to avoid further “cumulative regulatory layering” without economic assessment.
Other recommendations in the letter include designing a planning system that mandates local plans to include BTR policies; introducing mandatory targets for purpose-built rental homes; and reinstating multiple-dwellings relief for stamp duty land tax.
“Across the sector, schemes are being slowed, redesigned or withdrawn,” the letter states. “Elevated construction costs, higher interest rates, softer yields, expanded Section 106 expectations and cumulative regulatory change have materially compressed margins. Institutional capital requires stability to price risk.
“BTR has delivered more than 146,000 professionally managed homes and has capacity to deliver significantly more, including affordable housing at scale. It provides permanent professional management, consistent standards, long-term stewardship and institutional accountability. It is exactly the form of housing the UK should be encouraging.
“We stand ready to work with the government to recognise, redefine and revalue what BTR delivers for society, communities and the housing market as a whole, and to create a housing system that incentivises rather than thwarts institutional investment. Let’s seize the opportunity together.”
JLP launched its BTR business in 2020 and has progressed on three major schemes in Reading, Bromley and West Ealing, financed in partnership with insurer Aberdeen. It also set up an operational platform for Aberdeen-owned BTR sites, which manages almost 1,000 homes across four sites.
JLP said the move away from BTR also comes as it looks to “refocus on the partnership’s core retail brands”, John Lewis and Waitrose.
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