H/BR: Build to rent homes

BACKGROUND

Watkin Jones Group PLC (WJG) is the UK’s leading developer and manager of residential for rent homes. By spearheading this emerging sector, WJG are creating the future of living for a diverse and growing group of people who want flexibility, convenience, and a strong sense of community alongside the best location and value. Its purpose-built build to rent (BTR) homes, co-living and student homes are designed and built sustainably, and welcome people from all backgrounds to enjoy a great way of life, generating a positive impact for wider communities. Beyond residential for rent, its successful and well-established home-building division has an increasing focus on the delivery of affordable housing products and build to rent single family houses.

With increasing pressure on many areas to quickly create new housing, WJG an excellent track record of delivering homes fast without compromising on quality. Over 95% of its developments are on site within six months of the grant of planning permission and its in-house construction capacity means that it can rapidly boost local housing supply. Over the last 25 years WJG have delivered over 46,000 student beds across 130 sites, with a pipeline of over 12,300 BTR, student or co-living homes currently.

Fresh is WJG’s multi award-winning operator and manager of residential for rent schemes and works on behalf of a wide range of clients, managing over 20,000 rental homes and student bed spaces at over 60 sites across the UK and Ireland. Fresh achieves 95% customer satisfaction, and cares for its residents with a range of wellbeing and community building activities.

Our evidence suggests that cities like Cambridge offer a great opportunity for each of our residential for rent products, namely BTR, co-living and student homes. We are supportive of the Council retaining and/ or introducing policies to support the delivery of BTR and purpose-built student accommodation, however the Council does not have a clear and supportive planning policy environment to capture co-living. As such, our representation focuses upon ‘H/BR – built to rent homes’ within which co-living could be captured, but more likely requiring its own policy, an approach increasingly being undertaken across the UK (e.g. Policy H16 ‘Large Scale Purpose Built Shared Living’ of the London Plan 2021).

PLANNING FOR CO-LIVING

We encourage Greater Cambridge to proactively plan for, and therefore introduce policies, related to the provision of co-living across the Greater Cambridge area. This will allow for any planning applications for co-living within the Greater Cambridge to be assessed against those policies.

Co-living is a relatively new concept of housing which aims to provide a housing option for single person households, who cannot or chose not to live in self-contained homes or houses in multiple occupation (HMOs). In planning terms this housing type is sui generis non-self-contained market housing and is not considered conventional residential, which would fall under Use Class C3. This type of housing is not restricted to particular groups by occupation or specific needs.

In addition, communal amenity space is provided in lieu of private floorspace to create a sense of community and encourage social interaction and engagement between its residents. The concept is that one sleeps in their room but lives in the building. The private units are appropriately sized to be comfortable and functional for tenant’s needs and generally include en-suite bathrooms and limited cooking facilities (e.g. a kitchenette), but with access to larger kitchen facilities elsewhere in the development which allow for communal dining. It is important to note that the National Housing Space Standards do not apply to this type of accommodation due to its key attribute as a ‘cost-effective’ alternative form of housing, which would be proven negligible should unit sizes be increased.

WJG is actively pursuing and delivering co-living schemes in core cities across the UK, noting that co-living has played an important role in attracting and retaining talent and supporting economic development. In fact, it is of note that some UK cities have installed a specific and pro-active drive for more co-living developments (e.g. Exeter), recognising that those cities with already established co-living opportunities are at an advantage when seeking to retain and attract graduates seeking quality and cost-effective accommodation. On this basis, WJG has identified Cambridge as an ideal location to support, sustain and derive benefit from this residential model, noting that there is a particular drive to encourage graduate retention associated with a number of industries across the city and that co-living represents an excellent opportunity for Cambridge to achieve this.

A crucial role of the Greater Cambridge Local Plan is to maintain the supply of new housing, in order to meet housing requirements with sufficient flexibility to take account of changing circumstances (e.g. relating to the delivery of some development sites). A plan-led solution to supply will help to ensure that housing is delivered in the most sustainable locations, that meets the needs of groups with specific housing requirements, as set out in the NPPF at Section 5. Therefore, there is an overriding principle to facilitate the supply of housing to meet specific needs in the city, this should include housing targeted at single households, including co-living.

WJG believes that co-living has an important role to play in diversifying the choice of accommodation in Cambridge. It can also assist in realising strategic objectives around the attraction and retention of talent, providing that such accommodation is provided to a high quality, with appropriate room sizes, in appropriate locations and is delivered by experienced operators. Co-living also has the potential to make a significant contribution to physical regeneration and realisation of Greater Cambridge’s aspirations for place-making when delivered at scale.

WJG welcomes further discussions with Greater Cambridge on co-living and will review and respond to any draft policies that Greater Cambridge proposes to consult on at a later stage.

BUILD TO RENT (BTR)

WJG welcomes the proposal to include policies relating to BTR within the Greater Cambridge Local Plan. On the whole, WJG supports the Council’s proposed policy direction and has little comment to add at this stage.

WJG does not support, however, the suggestion that Greater Cambridge may look to limit BTR as a proportion of all dwellings within mixed tenure schemes. The basis of WJG’s objection is threefold, namely: that BTR responds to the increasing number of UK residents who are renting, rather than purchasing, their homes; it is recognised that it is an effective way of delivering a significant quantum of housing, as it is typically funded by institutional investors (e.g. pension and insurance companies); and the market is continuing to evolve and, whilst operational BTR across the UK has typically been delivered as apartments or flats to date, BTR single family houses are increasingly being developed across the UK. It does not therefore follow that the proportion of Class C3 BTR units within mixed tenure schemes is limited.

Similarly, concerns are raised regarding the suggestions to limit the overconcentration of BTR and its contribution to a mixed and balanced community. WJG questions the evidence behind this, as BTR is Class C3 (like conventional ‘for sale’ homes), is not limited to specific members of the community and, given its different form as apartments and/ or houses, caters for all members of society from young professionals through to family homes through to retirees looking to downsize and be located close to cultural and leisure facilities.

It is respectfully requested that policies related to BTR take account of the above.

A good option that should be encouraged.

USS acknowledges that Build to Rent can help provide suitable accommodation in highly sustainable locations. USS also acknowledges that Build to Rent can help contribute to solving the housing shortage and is therefore supportive of Build to Rent being supported in the emerging Local Plan.

Huntingdonshire District Council has no comment on this matter

We support this policy.

Countryside support the inclusion of a Build to Rent (BTR) policy within the emerging Local Plan and consider that is has an important role to play in meeting the housing needs of Greater Cambridge. Land to the west of Cambridge Road, Melbourn presents an opportunity to deliver BTR homes as part of the overall market and affordable housing provision.

Proposals should seek to avoid large clusters of BTR homes, however the policy should acknowledge and make an allowance for appropriately sized clusters, as these assist with the viability, delivery and on-going management of a high quality BTR proposal.

The policy could seek to set an upper limit for the proportion of BTR homes that can be delivered as part of a development proposal, and if so this level should reflect a proportion that allows for high-quality BTR homes to be delivered and managed. Any proposed upper limit should be properly evidenced and justified. The proposed upper limit of 10%, is unlikely to support the delivery of BTR homes on individual sites across the Greater Cambridge area which are seeking to deliver an element of BTR as part of the overall housing offer. A higher upper limit should be explored to understand what proportion would best support delivery on individual sites. Alternatively, the proportion of BTR homes could be determined on a site-by-site basis to ensure that a proposal would respond to its context appropriately and enable a deliverable proportion of BTR homes.

With regards to affordable housing, Countryside support that BTR homes which are provided at discounted market rent can contribute to the overall affordable housing requirement of 40%. The policy should also include for the flexibility that if the 40% affordable housing requirement of a development is being met through different tenure types that any BTR element would not be expected to provide affordable housing above the 40% requirement. The supportive text for the policy should acknowledge the following statement made at Annex 9 of the evidence base for the emerging Local Plan that Build to Rent:

“…does not cover stock built for sale where a developer/investor or registered provider decides to retain a number of the homes for use as private rented stock. It also does not cover for-sale homes that are purchased on completion of a private for sale scheme.”

NO. Policy should require 40% to be affordable rented.

Please see additional supporting planning commentary.

TMLC supports the principle of BtR within housing developments recognising the benefit of choice that this provides residents while helping to provide increased delivery rates.

The First Proposals acknowledges that BtR schemes should not provide the full 40% affordable homes and the proposed 20% Affordable private rented dwellings in such schemes is generally supported. The policy should include the option to submit and agree viability assessments where schemes cannot sustain the full policy target.

Policy H/BR is broadly supported. However, any potential restriction on quantum of Build to Rent (BtR) within a mixed tenure development, and in particular reference to the NEC AAP area, is not supported.

The policy objective to create mixed and balanced communities is supported. This strategic policy should not however set arbitrary restrictions on minimum or maximum proportion of homes which can be Build to Rent within individual schemes.
The amount of Build to Rent housing which is suitable for a scheme or site should be determined having regard to a range of factors including local housing need, the nature of the site and the existing composition of housing locally. It is not appropriate or necessary to set arbitrary limits. This may frustrate the delivery of much needed housing in locations where it is appropriate. The need to support housing delivery from a diverse range of developers is critical as highlighted by the Letwin Review (2018). Supporting the delivery of Build to Rent in appropriate locations is consistent with the overall aim of the Councils housing strategy (2019) evidence base which aims to provide wide and varied choice to meet needs of wide range of households. Failure to support Build to Rent will reduce overall delivery of good quality rental homes (of which there has been limited amount in Cambridge).

The policy requirement for Build to Rent developments to provide 20% of the homes as affordable private rent is supported. The policy should however be clear that this assumes a 20% discount to market rent.
The proposed 20% target is in line with national planning policy. National policy is however clear that the 20% target assumes 80% of market rent (NPPG Paragraph: 002 Reference ID: 60-002-20180913). It also confirms that where a greater discount is proposed this will need to be balanced against the quantum.

The policy requirement for the affordable homes to be distributed in a set way is unnecessary.
The affordable housing in a Build to Rent scheme is tenure blind (indistinguishable from the private) and is managed by the same operator. There is therefore no need to prescribe how it is distributed provided all tenants have access to the same on-site services and amenities.

Build to Rent (BTR) Homes are an important housing model for diversifying the housing market as has been recognised by the Government through the NPPF and PPG and there is a requirement to plan positively for rented homes in Local Plans. The inclusion of a policy specifically addressing this form of development is therefore supported. BTR expands residents’ access to, and choice of, good quality housing, helping affordability in the widest sense.
BTR is different from the existing private rented sector offer through the professional management and longer tenancies for those who want them of high-quality, purpose-built homes. It is important to recognise that whilst the BTR sector may have initially been focused on town/city centre developments of apartments the model has diversified to include all types of homes including family homes. BTR can also increase the overall supply and accelerate the construction of new homes due to the different market it serves.
Countryside recognise the important role that the BTR sector can play as part of the overall mix of housing to be provided at Bourn Airfield which will include a policy compliant 40% affordable housing. It is considered that the provision of BTR will further broaden the appeal of living as part of a new community by widening the choices available and will assist in bringing forward the proposed development more swiftly than originally envisaged by the Council.
The PPG provides the following guidance to LPAs in preparing Local Plans which consider BTR: “As part of their plan making process, local planning authorities should use a local housing need assessment to take into account the need for a range of housing types and tenures in their area including provisions for those who wish to rent. Specific demographic data is available on open data communities which can be used to inform this process. The assessment will enable an evidence-based planning judgement to be made about the need for build to rent homes in the area, and how it can meet the housing needs of different demographic and social groups. If a need is identified, authorities should include a plan policy setting out their approach to promoting and accommodating build to rent. This should recognise the circumstances and locations where build to rent developments will be encouraged – for example as part of large sites and/or a town-centre regeneration area.” Paragraph: 001 Reference ID: 60-001-20180913
The PPG is therefore clear that the onus is on LPAs to consider how BTR can meet housing needs and create mixed and balanced communities. Concern is therefore raised that the proposed policy direction seemingly seeks to direct this requirement on to the applicant rather than being considered in a Plan led manner. It is considered there is a clear and evidenced need for BTR provision in the Greater Cambridge area and therefore the Local Plan should be positively planning to support this as part of a diversified housing market.
The proposed policy direction also seeks to seemingly restrict how much BTR could be brought forwards, although a decision on the exact quantum is deferred for later stages of plan-making. Concern is raised regarding this proposed approach. Whilst we understand from the supporting text that the Council are concerned that the provision of a significant quantum of BTR would result in a reduction in the level of the overall affordable housing delivery (as BTR would likely be subject to a 20% affordable housing requirement rather than the 40% of general market housing locally) it is necessary to consider the needs for all forms of housing. Although no quantum is proposed at this stage, it is noted that the draft North East Cambridge Area Action Plan (AAP) proposes a restriction of no more than 10% of the total housing across the AAP being BTR. Importantly the AAP is only in draft and we are unaware of any similar restrictions being successfully introduced elsewhere in the country. Clearly no such restriction could be applied to other forms of private rented accommodation by private landlords. It is therefore considered such an approach is unjustified.
A variety of business models will exist for the provision of BTR and therefore flexibility should be allowed within the final policy wording to reflect this. It should be noted that Countryside will deliver BTR on Bourn Airfield whilst also delivering a 40% policy compliant level of affordable housing.

Not sure that I agree with this - developers seem to win out over renters.

Build to Rent (BTR) Homes are an important housing model for diversifying the housing market as has been recognised by the Government through the NPPF and PPG and there is a requirement to plan positively for rented homes in Local Plans. The inclusion of a policy specifically addressing this form of development is therefore supported. BTR expands residents’ access to, and choice of, good quality housing, helping affordability in the widest sense.
BTR is different from the existing private rented sector offer through the professional management and longer tenancies for those who want them of high-quality, purpose built homes. It is important to recognise that whilst the BTR sector may have initially been focused on town/city centre developments of apartments the model has diversified to include all types of homes including family homes. BTR can also increase the overall supply and accelerate the construction of new homes due to the different market it serves.
Countryside recognise the important role that the BTR sector can play as part of the overall mix of housing to be provided at the Bourn Airfield development which will include a policy compliant 40% affordable housing. It is considered that the provision of BTR will further broaden the appeal of living as part of a new community by widening the choices available and will assist in bringing forward the proposed development more swiftly than originally envisaged by the Council. It is considered these principles could also be applied to the proposed development at Fen Ditton.
The PPG provides the following guidance to LPAs in preparing Local Plans which consider BTR:
“As part of their plan making process, local planning authorities should use a local housing need assessment to take into account the need for a range of housing types and tenures in their area including provisions for those who wish to rent. Specific demographic data is available on open data communities which can be used to inform this process. The assessment will enable an evidence-based planning judgement to be made about the need for build to rent homes in the area, and how it can meet the housing needs of different demographic and social groups.
If a need is identified, authorities should include a plan policy setting out their approach to promoting and accommodating build to rent. This should recognise the circumstances and locations where build to rent developments will be encouraged – for example as part of large sites and/or a town-centre regeneration area.”
Paragraph: 001 Reference ID: 60-001-20180913
The PPG is therefore clear that the onus is on LPAs to consider how BTR can meet housing needs and create mixed and balanced communities. Concern is therefore raised that the proposed policy direction seemingly seeks to direct this requirement on to the applicant rather than being considered in a Plan led manner. It is considered there is a clear and evidenced need for BTR provision in the Greater Cambridge area and therefore the Local Plan should be positively planning to support this as part of a diversified housing market.
The proposed policy direction also seeks to seemingly restrict how much BTR could be brought forwards, although a decision on the exact quantum is deferred for later stages of plan-making. Concern is raised regarding this proposed approach. Whilst we understand from the supporting text that the Council are concerned that the provision of a significant quantum of BTR would result in a reduction in the level of the overall affordable housing delivery (as BTR would likely be subject to a 20% affordable housing requirement rather than the 40% of general market housing locally) it is necessary to consider the needs for all forms of housing. Although no quantum is proposed at this stage, it is noted that the draft North East Cambridge Area Action Plan (AAP) proposes a restriction of no more than 10% of the total housing across the AAP being BTR. Importantly the AAP is only in draft and we are unaware of any similar restrictions being successfully introduced elsewhere in the country. Clearly no such restriction could be applied to other forms of private rented accommodation by private landlords. It is therefore considered such an approach is unjustified.
A variety of business models will exist for the provision of BTR and therefore flexibility should be allowed within the final policy wording to reflect this. It should be noted that Countryside are committed to delivering BTR at Bourn Airfield whilst also delivering a 40% policy compliant level of affordable housing and therefore this scenario should be allowed for and tested in the Council’s viability assessment work.

Although we accept that the private rented sector has a role in meeting housing need, the sector is failing to provide secure, affordable and high standard homes. Reform to housing policy is needed at national level to
address this, but in the meantime local policy should try to limit the damage. A fundamental drawback of private rentals is that affordability cannot be guaranteed, but depends on the wider market conditions.
We note that “Build to Rent developments should meet the requirements as set out in the Greater Cambridge Housing Strategy (Cambridge City Council and South Cambridgeshire District Council, June 2021)”. At the time the draft of this policy was consulted on we raised concerns which still apply to the published policy. It is not clear how much of the policy will actually be enforceable by the councils and how much will be negotiable with developers. The word ‘should’ is frequently used, as in “Tenancies of at least three years should be offered”, “No- one should be excluded on the basis of being in receipt of state benefits”– does ‘should’ mean ‘must’ in this context? An example we would particularly like to draw attention to is paragraph 12: “Quality of schemes is important; particularly environmental standards in line with the councils’ Sustainable Design and Construction Supplementary Planning Document.” Does this mean that
developers will be contractually required to meet all standards set out in this document? The Green Party
believes all new-build homes must meet the highest standards of sustainability and requests clarification on
this point.
“The policy will require at least 20% of homes on a Build to Rent development of 10 or more homes to be affordable private rented, and make clear that these homes will contribute towards the overall 40%
affordable homes to be provided on a mixed tenure development.”. We call for greater ambition in the
provision of affordable housing. We note that 20% is the standard benchmark given in national planning guidance. Given the crisis of affordable housing in Cambridge, we would like to see a much greater proportion of affordable rents provided in these developments.