Ken Livingstone’s housing manifesto, published this week, appears to support the British Property Federation's (BPF) calls for greater institutional investment in London's rental market.
The document said that "good quality private rented housing also has an important part to play in meeting housing needs in London".
The BPF has led a much publicised campaign to encourage investment from large institutions into developing a 'build-to-let' rental sector. It published research in February in which Savills, the researchers, called for planning arrangements and lower development taxes to encourage developers to build homes to rent.
The manifesto criticises the current quality of some rental accommodation and recommends that institutional investment could improve standards in the sector.
The manifesto said: “A large and accessible private rented sector is essential to a successful world city and provides good housing options for many who seek flexibility and mobility in London's service-driven labour market. But despite many improvements too many landlords still provide poor value for money, inadequate maintenance and poor management.
“We will work with pension funds and institutional investors to encourage them to invest in private rented housing which would increase the supply of new homes and lead to improved, more professional housing management. This will include considering how the planning system could encourage such investment.”
Ian Fletcher, residential director at the BPF, said: “We welcome the focus the London Mayoral election has had on the private rented sector in the capital and this support for a build-to-let sector. It is clear from the current market conditions that people many will still not be able to afford to buy, even if prices continue to fall.
The professional rented sector has a key role to play in fulfilling the capital's housing needs, and those across the UK.”
Jennet Siebrits, head of residential research for CBRE Residential, said: “Build-to-let investors should not be deterred by a weaker housing market. The availability of funding may be decreasing due to the impact of the credit crunch, but this should not hamper cash-rich investors.
“Build-to-let represents a potentially large, untapped market which could be filled by institutional investors. The private rental sector has been buoyed by social and economic changes and, although owner occupation is the tenure of choice, increasing numbers of young professionals are renting for longer.”
Yolande Barnes, director of research at Savills, said: “London has for a long time had a much larger private rented sector than the rest of the UK and this has been an important source of accommodation for many households in the capital, especially for the younger and more footloose.
“The big challenge for London is in ensuring that new areas, mostly to the east of the City, where newly built housing will provide most of the homes, are at least as attractive to potential occupants as the established locations in the West. To achieve this, a wide variety of accommodation types and tenures will need to be created in fantastic streetscapes.
“Build to let landlords with an ability to contribute to, and fund, this variety, as well as the ongoing ability to manage both properties and places, will be an important component of London's built future.”
