In June this year, Residential real estate investment manager – Long Harbour – released its White Paper, Build to Rent: Helping the UK Build Back Better. The White Paper outlines how the sector can play a pivotal role in supporting the UK’s social and environmental challenges. We spoke with Rebecca Taylor, Managing Director of Long Harbour BTR about its White Paper, challenges facing the sector, modern methods of construction (MMC) and more.
What makes the White Paper so important?
The publication of Long Harbour’s White Paper – Build to Rent: Helping the UK Build Back Better – is especially timely given the number of issues the UK is facing right now, from a housing supply shortage to environmental issues in the wake of COP26. The White Paper demonstrates how the sector can help support the Government in tackling these issues.
We believe that in particular, Build to Rent can help to accelerate the Government’s push for quality, sustainable housing through its use of MMC. The UK’s housing stock is outdated and in urgent need of regeneration. Build to Rent developments exceed minimum energy efficiency requirements and support ESG considerations in every aspect from development to use.
What are the biggest challenges facing the sector?
Long Harbour’s engagement with key decision-makers has shown us that there are a lot of people who still don’t fully understand the sector, not least its primary benefits. Build to Rent can deliver social, environmental and financial benefits, which ultimately help renters who until now have been faced with a substandard private rented sector.
In addition, we need to make sure that the Build to Rent sector enjoys a level playing field with other parts of the housing market. The Government has announced legislation in the form of the Renters’ Reform Bill and the Social Housing (Regulation) Bill, and we need to make sure the Build to Rent sector is afforded the same recognition.
There remain concerns that decision-makers might impose unnecessary regulation on the sector, which will deter investment at a time when it’s needed most. While homeownership continues to feel like a distant aspiration, it’s essential that Government and industry work together to remove barriers to renting in affordable, quality housing.
Do you feel enough people truly understand Build to Rent and its benefits?
Admittedly, I don’t think we’ve been great as a sector at promoting Build to Rent’s benefits. However, Long Harbour has already demonstrated the success of its Build to Rent portfolio, not least through the resilience it exhibited throughout the pandemic. So far, it’s true that residents in our developments have been the schemes’ biggest advocates.
We do need to get better at promoting the sector’s benefits though. The Government’s White Paper on the private rented sector brought to the fore just how much reform was needed in the sector. If we can continue to engage with all levels of Government and make the case for Build to Rent, then decision-makers will start to understand how it can alleviate some of the existing issues in the private rented sector. Another factor is that renting is still deemed by many to be secondary to homeownership or traditional affordable housing models. While this might not change, there is an essential need for more quality housing of all tenure types.
Engaging with various decision-makers will also provide greater transparency on the capital behind Build to Rent schemes. Making this clearer will also underline the alignment between customers, local authorities and central government targets, all of whom recognise the need for more quality housing.
How can Build to Rent help alleviate the burden of the housing crisis?
Through championing MMC techniques, the Build to Rent sector can support the provision of high-quality, sustainable housebuilding. The sector continues to grow, meaning it can stimulate the faster delivery of sustainable housebuilding amid a general housing shortage.
Who do you see as the main potential beneficiaries of the MMC sector?
The MMC sector benefits everyone, from consumers to local authorities to central government. Championing the MMC sector supports the Government and public’s net zero ambitions.
In recent years, housebuilders and the broader construction industry have come under considerable criticism. Investing in MMC accelerates the overdue modernisation of the construction industry. Given the way in which MMC projects are deployed, investment in the sector can also address supply chain issues and shortages.
Finally, the Government’s levelling up and net zero agendas place a strong emphasis on providing opportunities for reskilling. MMC represents an invaluable opportunity to reskill construction workers in the green jobs on which our economy will depend on.
What are the main barriers to MMC identified in the White Paper?
Recent global events, such as post-Brexit regulatory challenges and Covid, have meant that there are limited products on the market. Simultaneous materials shortages have exacerbated the issue. The business model of MMC is heavily dependent on a secured and consistent pipeline to offset huge upfront investment requirements, which poses a concern for the sector and the wider construction industry.
How can the Build to Rent sector lead the way on MMC?
Build to Rent and MMC go hand in hand. Build to Rent’s income-based model supports the speedy delivery of quality, sustainable housing supply. Long Harbour has also appointed Tide Construction and Vision Modular to deliver 495 new homes in the heart of Walthamstow through the redevelopment of part of the 17&Central shopping centre. Our approach, made possible through the adoption of MMC techniques, has ensured minimal disruption to shopping mall and the local markets in ways which would not be possible if we’d pursued a more traditional method.
Can MMC help support the Government’s climate ambitions?
Absolutely. MMC is more carbon and energy efficient not only in its construction, but also once occupied. As mentioned above, MMC’s ability to deliver energy efficient and low-carbon housing will also help drive the Government’s net zero ambitions.
What are your thoughts on MMC in 2023? What do you think could happen?
We really hope to see a greater recognition of the role MMC can play in alleviating the housing shortage. Recent Government policy, whether through the Levelling Up and Regeneration Bill or the Heat & Buildings Strategy, has demonstrated a greater focus on decarbonising the built environment. With this in mind, the delivery of high-quality MMC housing will only serve to ensure a more sustainable housing stock.
