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UK: Think tank Centre for London is calling on councils to develop build-to-rent (BTR) homes for key workers and middle-income households, to help improve rental affordability and increase housing supply in London.
The proposal suggests a council-led BTR model – in which local government or social landlords would build and run intermediate rental homes. These homes would be priced above social rent but below full market rates.
The report recommends the homes could be funded through a new Local Housing Allowance (LHA) rate linked to inflation, providing councils with more stable rental income to support future development.
Rob Anderson, research director at the Centre for London, said: “The argument to central government here is, you’re already spending a lot on LHA; you’re getting very bad outcomes for it. This will not, in the short run, help you spend less, but it will get you much better supply.”
Those backing the proposal say it will aid in providing more rental homes, and ease pressure on the London housing market. But some in the industry have said that the model would still need a lot of government investment to be financially viable.
The idea is in the concept stage and further research is required regarding the costs and the way the model can be implemented.
Highlights:
- Centre for London has proposed a council-led build-to-rent model to deliver intermediate rental homes for key workers and middle-income households across London.
- The proposed build-to-rent scheme would use an inflation-linked Local Housing Allowance model to provide councils with more stable rental income for future housing development.
- Supporters say the municipal build-to-rent model could increase housing supply and improve rental affordability by delivering more homes below market rental rates.
- Industry experts caution that council-led build-to-rent developments would still require significant government funding to remain financially viable despite the proposed funding model.
- The municipal build-to-rent proposal remains at the concept stage, with further work needed to assess costs, funding and how the model could be delivered.
