The government has given its backing to a new private rented sector project that will see key growth cities in the UK welcoming more purpose-built homes for residents. Experts say the scheme could help to create 'hundreds of jobs' across key areas and attract improved numbers of skilled people to live and work in the cities affected.
The Build to Rent sector, which builds large-scale developments specifically for rent rather than sale, has been on the verge of something big for some time now, but the government has previously been somewhat against the idea, as it tried to promote ownership through first-time buyer schemes. But now, through the new Home Building Fund announced by chancellor Philip Hammond in his Autumn Statement, it has committed to fund around ten per cent of an ambitious new project.
Westminster will spend £45 million on an initiative that will see a total of 2,062 homes built in three key cities. There will be 995 built in Manchester through the £400 million development, while there are 744 planned in Leeds, and 323 in Birmingham.
Housing minister Gavin Barwell said of the project: "Alongside home ownership, we’re determined to create a bigger, better private rental market to offer greater choice for tenants in a country that works for everyone.
"This is one of the largest private rental sector deals in the UK and will not only create thousands of homes for people in Birmingham, Leeds and Manchester, it will create jobs and opportunities for many hundreds of people."
The main strength of this project is that it will help to give the three cities much better access to an improved workforce. Building the sort of homes that people will want to live in can help to attract young skilled professionals to the cities, giving businesses a stronger supply of skilled workers to select from.
Younger people have traditionally looked to buy homes as something of a life milestone in the UK but in recent years this has changed, as more and more young professionals see the rental market as a preferable option. Shorter contracts and less commitment means they feel freer to follow their dreams and advance their careers with the ability to move home quickly.
The peak home ownership levels in the UK hit around three-quarters in the 80s and 90s, but this has dropped markedly in the last few years, and according to Eurostat data, only around 63 per cent of people in the UK now own their own home, bringing the country more in line with the rest of the continent, where renting is more prevalent.
This trend is very common in emerging cities like those in the Northern Powerhouse, which have seen a swell in professionals and skilled individuals moving to them in recent years. For example, in Manchester, home ownership is way below the national average, coming in at just 58 per cent after a fall of 14 percentage points in the past 13 years. This drop is quicker than in London, where ownership has fallen by around 13 percentage points in the same timescale.
And it's not just Manchester where this is taking place. Leeds and Sheffield have seen similarly sharp drops in ownership in recent times, despite a rise in the populations of each city over the past decade-plus. It indicates that as more skilled people move to these cities to take advantage of the improved numbers of digital jobs, there has been a swell in demand for the rental sector.
With more homes being built with such a demographic in mind across the key northern cities in the next few years, it could well be the case that we see Manchester, Leeds and Birmingham experiencing growth in skills as more young professionals see them as fantastic places to live and work, which can only be good news for the city's businesses.
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