Local authority to build new homes for private rent
A local authority is to build new homes for private rental. The Royal Borough of Kensington and Chelsea will be building on its own land, following the Government’s announcement of support for a new build-to-let sector.
It has selected Grainger, the UK’s largest listed residential landlord, to develop and manage two schemes in the borough for mixed-tenure housing.
Some will be privately sold and some will be affordable housing, but most of the development will be purpose-built private rental accommodation managed by Grainger for the long term under a 125-year agreement.
The council said that this innovative approach will see it retain freehold ownership of the sites and share a proportion of the long-term rental income stream with Grainger, who will also receive a management fee.
The intention is to submit planning applications next year.
* Meanwhile, the Labour Party in a key London borough is examining the possibility of buying up private housing and renting it out to private tenants.
Labour has Croydon firmly in its sights for the 2014 borough elections, having narrowly lost to the Tories in 2010.
Housing is expected to form a crucial part of the local manifesto in a part of London severely affected by last year’s riots, and where the number of families in emergency bed and breakfast accommodation is 500.
Labour leader Councillor Tony Newman said: “We have got to look at both the long and short term.
“There is obviously a need to build more houses, but we think the council could look at buying up property in the private sector and, by becoming the landlord, make more homes available to families.”
* In another initiative, a housing association is to spend £250m on setting up a private rental portfolio in London of 1,000 homes over the next two or three years.
London & Quadrant, the largest social housing provider in London, hopes to secure backing from institutional investors, and plans to refinance the scheme once the portfolio is complete. It would then use that money to build more homes for private or affordable rent.
The Government last month announced a £200m private rented sector fund and £10bn of state-backed guarantees to encourage ‘build to let’ schemes, and housing associations have been told to consider ‘a leap of faith’ into the private rented sector.
London & Quadrant says it will go ahead with its proposals regardless of the fine detail on the Government’s plans.