Why I was right about the Montague Review

When the suits from investment companies and their stuffy mates say they have been talking about the need for more investment into the private rented sector (PRS) for a long time, I draw a deep breath.

Don’t I know it. Well over five years. Talking, that is. While nothing happens.

When I first tackled the subject in Property Week in October 2007, I had already given evidence to a Parliamentary Select Committee on PRS and written a tediously large number of articles which fell on universally deaf ears.

In that article I made the following suggestions as to how developers could make it happen.

1. Find a site. Negotiate a planning permission based on all the flats being to let, with a covenant strictly restricting the use to renting for 25, 50 or 100 years.
2. Suggest to the council that this would result in lower market rents, effectively creating affordable housing for key workers without any public subsidy, provided the following conditions are met:
3. Negotiate removal of the ‘affordable homes’ quota, on the basis that the rented flats will be affordable anyway.

If you cross check this with the Montague Review (to which I was not, btw, even asked to contribute) you will find that some of the recommendation might have been separated at birth.

Am I cheered, then? Well, not really. In my experience these reports come and go and they might as well be talking of Michaelangelo.  The main reason investors consider PRS to be a high-risk proposition (when it is the major housing provider in many Western countries)  is not financial but political.

While politician of ALL credible parties worship at the altar of home ownership and refuse to deviate from it in the name of “aspirations”, PRS will go nowhere. This is not, however, a counsel of despair. If the cycle can be broken by cracking the egg, politicians may be persuaded.

But the initiative MUST come from the private sector and be led by it profitably, to avoid PRS falling back on cosy old public sector subsidies. And this of all governments must at the very least give the fledgling sector the illusion of being loved. Because otherwise, we will be having this conversation all over again in 2017 and 2022. But our children will have nowhere to live.

By Mira Bar-Hillel