week brought some unexpected bad news on the economy, but failed to
bring expected news of the conclusions of Sir Adrian Montague's review
of barriers to investment in the private rented sector.
Sir Adrian's review was originally expected to report before
Parliament went into recess earlier this month. Publication has
been delayed, but the report is widely expected to recommend a
bundle of measures to kick-start large-scale institutional
investment, including government-backed loans to support
large-scale new build schemes for rent, a task-force to scour
public sector land banks to release suitable sites for private
rented development, and relaxation of section 106 arrangements to
allow developers to include housing for market rent in new
developments in place of affordable housing.
While home-ownership remains out of reach for so many, it is
difficult to deny the case for a bigger and better managed private
rented sector. And it is clear that the barriers to large-scale
institutional investment in private rented housing are real; if
they were not the opportunities offered by the sharp growth of the
sector over the past decade would surely have been seized.
Governments - both central and local - must be willing to take
action if they are to be broken down. But if the government acts on
the recommendations that Montague looks likely to make, the danger
is that councils will be forced further down the road of
marginalising social rented housing.
Already the lion's share of new sub-market rented developments are
for letting at affordable rather than social rents; squeezing
additional rented housing out of existing and planned developments
puts further pressure on the scope for social rented
The solution is not to accept the constraints imposed by the
current low level of construction activity and existing public land
banks, and to refuse the choice between market and submarket,
affordable and social rented housing - most areas need all of them
in a mix that suits local housing market conditions.
Instead of worrying endlessly as to which should have the highest
priority within a national housing strategy hamstrung by spending
cuts, the government should accept the case for spending a little
more on housing.
This week's news that economic activity had fallen by 0.7 per cent
in the three months to June came as an unpleasant shock, and
prompted a further round of calls for the government to change
It is said that the case for housing investment to boost the
economy is well understood at the highest levels of government.
That is good news so long as it includes an understanding of the
case for investment in social housing.