Clever stuff this week from Deloitte, which said it would subsidise its graduates’ housing costs. It was a headline-grabbing, image-enhancing, issue-confronting move. The government should watch and learn.
Deloitte’s isn’t an intervention that will even scratch the surface of the housing crisis. But it will make life a little easier for its new London graduates. Two weeks rent free, a simpler registration process, a few bells and some whistles for 40 flats isn’t transformational. But, as partner James Ferguson says: “London has an image problem as a place where affordable accommodation is hard to find.” Deloitte has done its own image no harm at all in being seen to be addressing the problem and supporting its staff.
And East Village, the former Athletes Village on the Olympic Park of course, won’t be unhappy with the column inches garnered either: the marriage of one of the world’s biggest professional services firms with the country’s best-known PRS scheme will have a mutually beneficial effect.
The government could learn from the likes of Deloitte where even modest action speaks louder than words. There’s emerging evidence it is doing so.
In seeking to steal a march on rivals and think through its staff offer, Deloitte wasn’t deterred by the fact that KPMG had made a similar move a year ago when it pledged to offer employees preferential mortgage rates. Now, as Estates Gazette reveals today, the government will next month make a bold step to join up its own thinking.
Under plans currently being worked up, developers converting offices to residential use will soon have to provide “starter homes” at a 20% discount to market rate. Ministers will use next month’s Conservative party conference to outline the measure, alongside the long-anticipated extension of the permitted development rights rules, which allow conversions without the need for planning permission.
There’s flesh to be put on bones: ministers are still consulting on the exact threshold of starter homes that will need to be provided. Significantly, it is expected that the rate will be set nationally rather than left up to local authorities to determine, some of whom oppose office-to-residential conversions.
Will it be enough for the government to meet its manifesto commitment to build 200,000 starter homes by the next general election? Not in itself. But it’s a start. And with a housing bill slated for the autumn the clock is ticking; evidence of further thinking around the issue is needed fast.
There’s no getting away from the fact that for many developers it will present a headache as the requirement will impact on the viability of some conversion schemes. But you can see why ministers are attracted to the measure. Requiring starter homes on new-build schemes could see them delivered instead of other forms of affordable housing. Going down this road will remove that risk.
There are sums to be done – by developers and by civil servants alike. And there is a limit on how great a burden for delivering sub-market-price housing the private sector should bear.
But in terms of addressing the wider housing crisis, bold action is to be welcomed. More must follow.
■ A lack of women in executive positions in real estate, particularly in the UK, has prompted EPRA to launch a mentoring programme. Research by McKinsey for EPRA found that just 11% of listed real estate companies in the UK had women at board level. The UK performs poorly compared to continental Europe – of the 94 companies in the FTSE EPRA/NAREIT Developed Europe index 22% had women at board level. Female board representation is highest in France.
Why does it matter? The promotion of women to board level has positive results, said McKinsey. Companies with a top quartile representation of women have 47% higher returns on equity and 55% outperformance in earnings.
Damian Wild is editor of Estates Gazette
