Mobilising the Manchester Model

Movements Towards Institutional Investors

Legislative Architecture: Formulating PRS Housing as a Novel Asset Class

Published under the post-crisis Conservative-Liberal Democrat coalition Government, the report: ‘Review of the barriers to institutional investment in private rented homes’, also known as ‘the Montague report’ was developed in consultation with a number of financial institutions, housebuilders, and local authorities for State strategy generation to encourage institutional investment in the Private Rented Sector. (Montague, 2012). Despite an increase of 1.6 million renters since the early 1980s (Montague, 2012:4) The Montague report stipulates further measures taken by Government ensures continual growth and maintenance of “real momentum” (Montague, 2012:3) in the PRS, which was:

“Inhibited by constraints affecting the supply of stock, by the treatment of rented housing schemes under the planning framework and by the need to create greater confidence among investors in the availability of good projects showing acceptable, secure returns.” (Montague, 2012:3)

Identifying characteristics of the existing housing market preventing expansion of the PRS housing market, it notes that Build to Rent (BtR) developments aren’t differentiated within the planning system. This legislative indifference vastly reduces profitability as Section 106 of the Town and Country Planning Act of 1990, requires all new housing developments to include a minimum of 20% affordable housing. (Silver, 2018) The Montague Report repeals these stipulations as:

“In many cases, it will be appropriate for authorities to waive affordable housing requirements in relation to schemes for private rental, or to the private rental component of larger schemes.” (Montague, 2012:20)