The Medway housing market has gone through a seismic change in the past couple of decades with the Buy-to-Let (BTL) sector evolving as a key trend, for both Medway tenants and Medway landlords.
A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Medway population.
In 1981, the population of Medway stood at 240,300 and today it stands at 276,500.
Currently, on average, the private rented (BTL) sector accounts for 17.6% of households in the area. The Government want to assist people and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told:
68.10% Medway people owned their own home in 1981
22.72% Medway people rented from the Council or Housing Association in 1981
and 9.18% Medway rented from a Private Landlord
The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Medway set to grow to 335,000 by 2037 – it is imperative that Medway Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.
One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (BTR) sector (instead of the BTL sector). These include allowing local authorities to proactively plan for BTR schemes, and making it simpler for BTR developers to offer inexpensive private rented homes.
To do this, the government will invent a distinct affordable housing class for BTR, called Affordable Private Rent, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.
Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Medway landlords need to be aware of as there will be greater competition for tenants.
Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect on demand services from click and collect, Amazon, dating apps and even TV with the likes of Netflix. Many Medway youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.
Private rented housing in Medway, be it BTL or BTR, has the prospective to play a very positive role.
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Thanks for reading.