MIPIM 2016: The UK’s fledgling build to rent sector has plenty to learn from the more developed approach to multi-family housing in the US.
Housing the world is the MIPIM conference theme, specific enough to focus minds on one of the great challenges of today yet sufficiently general to capture the different approaches around the globe.
I doubt multi-family is a phrase that will be adopted in the UK any time soon, though the evolution of PRS into build to rent has been quick and thorough. But other US lessons are being learned.
Speaking at a session on turning the sector into an institutional asset class, Mark Linton, the past chief of staff of the US department of HUD – Housing and Urban Development, appointed by president Obama no less – was too polite to say that the UK was behind the US. But behind it is.
Compare and contrast the two.
Currently some 25% of multi-family housing development is institutionally funded in the US, compared with around 2% of PRS in the UK. Does that highlight the scale of the opportunity or point to our diminished appetite for renting?
A bit of both perhaps. But that is changing. A combination of financial drivers, infrastructure investment, placemaking, cultural shifts and regulatory nudges has propelled the US market. The UK needs to find a similar formula though the model cannot simply be picked up and lifted.
It is not helped by stamp duty tax changes, even if housing minister Brandon Lewis told the UK’s resi cohort in Cannes that the change would have little impact on the sector and was equitable. That may be the case, but it does send a negative signal and will give some potential entrants pause for thought.
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