To an outside eye, English cities might seem deliberately designed to foment a housing crisis. Unconstrained by craggy topography or fortified ramparts, their Victorian developers built endless streets of low-rise terraces. Cities that expanded during the Industrial Revolution are less dense than their European equivalents and have far fewer flats. Their private rental sectors are fragmented, dominated by small-time landlords for whom property ownership is often a second career.
In recent years, large investors have begun bankrolling high-rise apartment blocks that promise to create the type of housing that English cities need. These “build-to-rent” developments are transforming the skylines of Manchester and London, and have added about 14,000 new homes each year since 2020. For a Labour government that hopes to build 1.5m homes, the sector’s growth looks like a blessing. Clive Betts, the Labour MP who chairs a build-to-rent taskforce, has described such developments as “good-quality housing with a real future”.
Labour’s pledge to “build, build, build” rests on the idea that supplying more homes will make housing more affordable. If only it were so straightforward. The housing researcher Adam Almeida recently found that in Brent, Ealing and Newham, London boroughs with the greatest number of these rental property developments, rents have increased by 48% to 52% since 2015, exceeding the city-wide average. Brent saw the highest rise. The borough is home to Britain’s largest build-to-rent development, in Wembley. Two-bedroom flats at this outer London development are priced between £2,471 and £3,370 per month. It is plausible that other landlords in the area may have seen these prices, and raised theirs accordingly.
Build-to-rent is attractive to governments allergic to public spending. The coalition government was keen to encourage the sector, commissioning a 2012 review that found such developments were already taking off overseas and in UK student housing. Evidence from both contexts is mixed. Residents in Amsterdam, Berlin and Copenhagen have accused large investors of helping to fuel the housing crisis, while newly built student apartments in Britain are often unaffordable for British students. The cheapest room at the Edinburgh branch of IQ, one of the UK’s largest student housing groups, currently costs £10,717 for a year’s term-time accommodation; the typical annual Scottish maintenance loan is £8,400.
The companies behind these schemes argue that they can offer tenants a better service. Many provide luxurious amenities. Given the choice between on-site dog spas and genuinely affordable housing, however, it seems likely that most tenants would choose affordability. Polling by YouGov in 2024 found that support for rent controls vastly outnumbered opposition. But such limits, of course, are antithetical to investors’ bottom line. Even in European cities with rent controls, new apartment developments are frequently exempted from them.
Labour’s housing plans risk sacrificing real affordability by relying on investors who naturally prioritise their own returns. A corrosive legacy of Thatcherite policy was the evisceration of genuinely affordable social housing through right to buy. While local authorities can technically borrow to build more homes, tenants are still allowed to buy these at a significant discount. Labour plans to reform (but not scrap) this policy. Its proposals for affordable social housing remain hazy. Until it delivers, renters will continue getting squeezed.
