‘Urban regeneration’ is a longstanding buzzword. However, it’s only recently that PRS has found its way into the all-important mix that makes such schemes a success. That is because it’s identity crisis made local authorities keen to keep it at arm’s length.
While the PRS has rapidly evolved, a few years ago there were no notable specialists. Individual private landlords, whose quality and reputation is well documented, drove the sector. Many took stock from housing developers who struggled to hit sales targets in often challenging locations, and ‘stack them high’ to maximise yield. The quality of tenant and stock management was not a priority, resulting in a high turnover level of poor quality stock, partly due to the resultant anti-social behaviour.
Working with Liverpool City Council we built 230 BTR homes which we now let and manage.
It’s hardly surprising that many local authorities didn’t feel that PRS had a part to play in urban regeneration plans and actively discouraged it – many have introduced licensing schemes to tackle rogue landlords and drive them out of deprived areas.
Times have changed, major capital investors and property specialists are focusing on PRS, offering a quality product and service that local authorities can trust. The sector is on a more stable footing and starting to be acknowledged as a strategic and functional element of urban regeneration.
A PRS specialist partner has the ability to build-out units very quickly, transforming street scenes, providing instant regeneration. The key is for partner organisations to understand the project’s goals and who the local authority wishes to attract. Stock can then be tailored accordingly, delivering that the right size homes at the right price.
Done well, PRS schemes have far reaching appeal, attracting tenants from further afield. Our evidence from schemes in the North West shows that 55 per cent of tenants moved from over three miles away. The demographic is mixed, with 22 per cent of tenants over 45, 43 per cent having children and more than 37 per cent having a household income that exceeds £45,000. The whole principle of urban regeneration is to bring about positive change and these figures show that targeted PRS schemes have the ability to bring in the new, rather than just recycling the existing.
As part of its evolution, PRS projects now focus on tenant longevity rather than constant churn. It isn’t a difficult equation: valued tenants will stay longer and PRS partners should be thinking in the medium to long-term. This approach is beneficial to all as happy, longstanding tenants not only bring about financial benefit for the local authorities and investors, they also create the stable, positive communities that urban regeneration projects strive for.
The key to any successful PRS scheme is to do more than just build homes and this is where it lends itself to urban regeneration. That is exactly what we did as part of the Norris Green project in Liverpool.
Three miles from the city centre, Norris Green was ripe for regeneration. Defective pre-cast houses had left residents suffering from anti-social behaviour, fly tipping and arson attacks. The community deserved a better place to live.
Working alongside the residential and urban regeneration specialist, Sigma Capital Group, we formed a formal partnership with Liverpool City Council and created a shared vision, including 230 B2R properties, all of which SDL is letting and managing.
£100 million has been spent on the area, changing not just its physical appearance but its atmosphere and ambition. For change to be embraced, we knew that the community needed to be at the forefront of the plans. At every stage, we asked them questions and listened to the answers. As a result many residents have returned to an area they loved, whilst others move there because of the newly rejuvenated community.
It’s clear that the residents of Norris Green have a stable future, but what about the future of PRS as a whole? Growth will continue at a pace, as schemes such as the one in Liverpool give local authorities confidence that PRS should no longer be overlooked for urban regeneration. There will, of course, be more partnership work for businesses like ours, but I also believe we will see a greater number of local authorities and housing associations choosing to take on PRS projects on their own. With no Right To Buy clause, they actually offer an attractive capital investment opportunity and long-term income stream for authorities facing increasing cutbacks in other areas.
However the growth is achieved, it will come and I’m confident that PRS should, and will, form an important part of all urban regeneration planning applications.
Paul Staley is Director of Private Rental Sector (PRS) at SDL Group.