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We very much welcome the LHB; with £200M of funding for the pilot phase and a predicted output of up to 4,000 sub-market rent homes it will certainly help to meet the huge affordability challenge in London’s rental market, as well as contributing to the overall level of supply without seeking to flood the housing for sale market.
The big question is - will the GLA receive sufficient bids to meet this programme?
There are two big challenges. Firstly, the private rented sector (PRS) has struggled to compete with housing for sale over the last 15 months or so and therefore, whilst Countryside has been keen to build up a PRS programme with investors, the sums simply haven’t stacked up – so far. However, a cooling of the housing for sale prices and sales rates and an ever increasing number of PRS investors should improve the position, although it’s questionable whether this will quick enough for the pilot programme.
Secondly, what appetite will registered providers have for LHB? They haven’t been noticeably keen, with one or two exceptions, on the PRS sector, but the hope is that this sub-market rent product and the public subsidy available to deliver it will whet their appetites.
Our position is that the very short bid timetable for the pilot phase means that we can only realistically consider one or two schemes but we are already in discussion with prospective registered provider partners; the next few weeks will reveal just how viable this initiative is likely to be.
Michael Hill, New Business Director
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