New “mansion blocks” of high-quality private rental apartments could spring up in London by 2014 under plans to boost flat-building.
Government sources say talks are under way with major builders including Taylor Wimpey to encourage a new construction drive in the rented sector as part of the push for economic growth.
Housing Minister Grant Shapps said London was ripe for a boost in rented homes, and that the popular interwar mansion blocks, many of which have since been turned into privately owned flats, were the last big example of institutional investors creating rented apartments.
“I think London will lead the way again,” he added. “Rents are very solid. From the point of view of institutional investors this is almost the natural place to start.
“I think there is a clear demand for rented property and a clear need for high-quality property, maybe with five- or 10-year leases.”
The plans were revealed as ministers published a proposal to abolish an official quota of “affordable” homes in new developments.
In a report, Sir Adrian Montague, chairman of private equity firm 3i, said the rented sector was being hampered by planning rules including the quota, and a lack of confidence among investors. However, critics said scrapping the quota would stop needier people getting on the housing ladder.
National Housing Federation chief David Orr said: “While we agree that there needs to be more private market rented housing, this should not be at the expense of affordable homes.”
Campbell Robb, chief executive of charity Shelter, said: “While more rented housing could help ease pressure on this overheated market, it’s vital this does not come at the expense of building affordable homes for people struggling to get on the ladder.”
