Ryan Prince on the need for more professional landlords


In a novel format on PropCast, Senior Advisor to Montfort, Andrew Teacher, facilitates a debate between Dr. Anna Minton, reader in architecture at the University of East London, Honorary Professor at the Bartlett School of Sustainable Construction, and author of ‘Big Capital: Who Is London For?’, and Ryan Prince, vice chairman of Realstar Group and founder of build-to-rent brand UNCLE. The trio discuss the causes of, and possible solutions to, the housing crisis.

 

It’s not every day that a guest asks the first question on PropCast.

But in getting to the root causes of the UK’s housing crisis, where a home costs thirteen times the average salary in London, Dr. Anna Minton has one for Ryan Prince: “How would you position your business in relationship to the housing crisis, particularly affordability and property price inflation in the centre of cities?”

Prince, who heads up the build-to-rent business UNCLE, thinks that the lack of truly affordable housing is primarily the result of government inaction. “In the last 30 years, you have no public suppliers of housing,” he says directly.

“That is the biggest shortcoming over the last number of decades – government-controlled housebuilders, whether you call those councils or whichever quango form you’d like, they no longer exist and therefore produce zero housing.”

Minton, who has written extensively about the housing crisis, agrees. But she thinks the problem goes further. “Policy seems to be completely paralysed as to why for-sale housing isn’t being produced,” she notes. “But it’s also completely paralysed as to why affordable and social housing isn’t being produced.”

There is also the issue that for many in the UK, home ownership is deeply culturally ingrained, and seen as a necessary precursor to living a successful life. However, this may not always be the case, as Prince argues: “If you take what would be your financial contribution to home ownership, which is a deposit, principal payments, maintenance payments on your home, and you took that and you put that into a Vanguard S&P 500 index tracker, you would be more liquid, earn a higher rate of return, and have greater financial flexibility than if you had owned your home on various points in time.”

And while Prince notes that he is not in the business of “proselytising” renting, UNCLE is “trying to bring a hotel-style, branded, service, customer-centric approach to those people who predominantly choose to rent”, given that historically, rental properties have tended to be inferior.

With an election around the corner, Minton does not feel overly optimistic that either of the two main parties have any tangible solutions.

“The only thing Labour keep saying ad nauseum is that they’re going to ungum the planning system and build lots more for-sale housing,” she observes. “That just seems to be parroting a Tory line. What’s really disappointing is that they haven’t put any figures for the amount of social housing that needs to be built. You need an awful lot of low-cost housing to be built because people simply cannot survive in the situation that we are in.”

And if Minton were housing minister?

“I think the government should pledge to build a lot more social housing,” she says. “I think that they should look at capturing planning gain. And something close to a land tax.”

She continues: “If not every decision was made by best value considerations, and it was made looking more broadly at the social needs of each borough, I think we’d start to see a different way going forwards.”

Prince is more optimistic on how policy might shape the housing sector.

“The two [main] party leaders are sane, honest, straightforward people,” he explains. “As a starting point, that’s a good thing for this country.”

This means that there are some positive policy suggestions, from his perspective – in particular “the ability to enable developers to fast-track decision making”.

And while the UK’s secondary cities – Leeds, Birmingham and Manchester to name a few – have made great strides in building more housing, “London is the crux of the challenge” for Prince.

“It’s the crux of the jobs. It’s the crux of GDP. And there’s 32 boroughs that make things incredibly complicated to operate within.”

Looking at the wider state of the market, Minton acknowledges that a diversity of businesses is a good thing.

“If I were housing czar for the day, I would want to envisage this plurality in the market where there would be room for all sorts of players,” she says. “Ryan, your business is not at all one I would have in my firing line.”

“In my firing line are those house builders who are not providing the housing that we need. Also in my firing line are policymakers who have not got anything in their arsenal for providing genuinely affordable housing.”

“So I don’t know if I’m going to be able to reach any conclusions,” Minton continues, “but hopefully I’ll be able to provide a more global picture of some of the problems because I think we’ve got quite a parochial way of looking at issues in this country.”

 

Participants

Ryan Prince

Vice Chairman

Realstar Group

Dr Anna Minton

Writer, Journalist and Reader in Architecture at the University of East London and Honorary Professor at the Bartlett School of Sustainable Construction

Andrew Teacher

Senior Advisor to Montfort

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