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Locations are being targeted where there is a clear shortage of good quality rented housing available and the mix of purpose-built houses and apartments will be designed to meet local needs. Investment-led solutions and innovative funding mechanisms to produce new homes, not reliant on grants or subsidies, adds up on paper, but there is a third opponent to add to the twin evils of planning and local sentiment, namely British culture. Also with a local authority, as landowner, having an equity stake in any development, the road to planning decision-making will be heavily scrutinized. In Germany for instance long-term investment funds own big chunks of housing stock, giving tenants the security of long-term occupancy. But in the UK we are firmly wedded to home ownership. Last month Ed Hammond, Show House City correspondent and the FT’s construction reporter, argued in these pages that convincing pension and insurance funds to open their cheque books “might be the best solution for helping the UK housing market out of the mire it has wallowed in since the traditional bank lending market collapsed.” Hammond quoted a volume housebuilder who said for the private rental market to work you needed “someone to come in right at the beginning and say let’s buy this bit of land together, you build the houses and we can run the rental fund as an off- balance sheet joint venture partnership.” It seems if risk-averse institutions don’t

want a slice of the private rented sector, building contractors and property consultants do, although if the model proves successful, institutional investors will be obvious targets eventually to sell on stakes to. The institutions could just be warming

to the idea, with a report called Invest to Rent by the British Property Federation

and London Councils revealing that major investors, including well-known pension funds and insurance companies, may be prepared to invest up to £1 billion each in build to let. “The point for a lot of funds is they don’t want 100 units here and there. They want to buy a huge chunk of land and build 5000 homes with all the amenities and infrastructure that a small town would need. That is how they realize the right sort of economies of scale to make it work,” said John Messenger, housebuilding analyst at Royal Bank of Scotland. Andrew Telfer, chief executive of

Wilmott Dixon Regeneration, said the partnership aims to work with a number of public and private sector partners. “They can join our partnership as members, bringing in their land assets. We hope it becomes an attractive means to provide much needed housing for the skilled young professionals that local authorities want to retain. We’ll be able to use the land assets with the development, financial and property skills that our joint venture brings to create a new public-private partnership model.” Telfer says this is a natural progression

as the contractor turns developer and investor, while Savills, with its expertise across many property disciplines, will be well aware of development risk and viability and housing associations well- equipped to manage the properties. In terms of debt funding however the banks will need to be persuaded. Savills own forecasts claim that by 2016 the private rented sector will account for one in five of all UK households and the model takes away the risk of boom-bust housing cycles. “Germany has seen very little decline in house prices since the onset of the global recession. Meanwhile, in ownership-centric countries, such as the UK, Spain and Ireland, values have tumbled,” said Hammond. However you still suspect the culture needs to change before the game does.

‘Summer in the country’ Tycoon seeks Tycoons

Redrow Homes founder and chairman Steve Morgan has launched his annual hunt, through the Morgan Foundation, for the business tycoons of tomorrow. Morgan was recently named Entrepreneur of theYear in the PROPS Awards, the property industry event that has raised nearly £7 million for the children’s charity Variety Club. Morgan won the award for his successful return to the Redrow helm. “The Morgan Foundation is also committed to helping charities which support children, families and young people, so it’s a cause close to my heart,” said Morgan. The Morgan Foundation Entrepreneur Awards are in their fifth year, offering £115,000 in prizes and a range of professional services to support new businesses and young entrepreneurs, as well as charities and social enterprises.

PROPS Awards co-chairman Neil Sinclair, Miss World Africa Emma Wareus, Redrow chairman Steve Morgan and Miss World Alexandria Mills.


Stewart Milne, chief executive of the Stewart Milne Group, has won an Association of Colleges Gold Award for providing “inspiration to generations of students and apprentices.” Milne was an electrician’s apprentice at Aberdeen College in the 1960s. The Scottish housebuilding boss was awarded the CBE in 2008 and is also chairman of Aberdeen Football Club. “I didn’t really learn at school and I left at 15 with no qualifications. It wasn’t really until I started at college that education really engaged me. Aberdeen College has played a major part in my career,” said Milne.

Stewart Milne with Daniel Lawtie, an Aberdeen College graduate and now an apprentice with the Stewart Milne Group.


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