One of the biggest opportunities to build additional homes not mentioned by Resolution Foundation’s chief economist on Radio 4 this morning was build to rent – where institutional investors invest cash for the long-term creating homes just for rent. It is one way of building new homes quickly and uses a different stream of money – a pot that wants to invest for the long-term and to generate income, often to pay back pension pots.

This is important because as society changes, and we enter a world where people don’t want to own cars, records or DVDs, people are becoming more relaxed about paying as they go and not being tied down with commitment, responsibility and indeed masses of debt. Much of the focus of today’s debate has fallen predictably on struggles to get on the housing ladder. Nobody, surprisingly, has questioned the wisdom in saddling thousands of people with debts they may not ever be able to pay back. This is precisely what many of the government housing initiatives do. If our rental market was functioning – as it is in North America – would the English disease of “ownership at all costs” be quite so contagious?

One of the other points missing from today’s debate is the fall in the costs of mortgages. These have somewhat softened the blow of increasing house prices. This is another key point hardly referenced in today’s reports: the cheap cost of debt continues to inflate prices. Just look at Sweden which has negative interest rates where house prices have shot up by 25 percent recently. This is an opportunity for some but a risk for others: rates may not be set to rise in the medium term, but still, embarking on a nationwide PFI-style exercise of laying down household debt doesn’t seem
like great policy.

The issue of affordable housing is a different and complex one. There is a bigger debate to be had around how society subsidises key workers – whether through the tax system – and supports their needs. But the issue of housing the poor is something no government has done anything for in years. The simple reality is that housing benefit is a massive income stream that could be capture by the state itself. What’s to stop the current government borrowing money at record low rates and building a ton of social housing? It could then rent it all out – effectively paying the rent to itself – and then sell on the entire asset to a pension fund or insurer, such as L&G or Aviva, for a tidy profit.

In the meantime however, while the debate invariably falls on to first time buyers and those seeking social housing, the silent majority of (Britain’s 9 million) private renters are largely ignored. Research we published on behalf of the BPF and Addleshaw Goddard last year, widely covered extensive by BBC radio and TV as well as the Economist, showed £30bn ready to invest in build to rent. This figure was quickly revised up to £50bn by agents and many now estimate the number to be nearer £90bn. Either way, it’s a meaningless figure until stuff begins to be built.

Momentum is growing. Companies like Essential Living, a London-focused build to rent developer have emerged. Their first scheme is in Archway and opens next month. The FT covered it in a big feature on build to rent. It will be followed by another project in Theresa May’s backyard of Maidenhead. A dozen more projects will follow as the company looks to create more than 5,000 homes
for rent. Harrogate-based Moda Living, backed by 1bn funding from Apache Capital, is focused nationally on creating £1bn worth of build to rent homes. One of its first projects is an impressive tower in the heart of Manchester within the NOMA neighbourhood. Westrock is doing a similar thing in tier-two towns like Crawley, Stevenage andBracknell where its first rental scheme sits about the train station. Its brand, PLATFORM_ is aiming to tempt renters with an integrate app and tech platform together with high-spec interiors.

In the BBC’s former stomping ground of west London, HUB, a London-based developer of mid-market homes, has created an impressive scheme above North Acton Tube. Named ‘Rehearsal Rooms’, after the former rehearsal space occupied nearby by the Beeb, it has been forward-funded by M&G Real Estate, part of Prudential. It isn’t without some irony that the Pru used to be one of the biggest landlords in Britain back when three quarters of Brits rented a century ago.