Skip to main content
  • About
  • News & Insights
  • Careers
  • International
0808 291 3524
Dialog that contains search functionality
Irwin Mitchell Logo
  • Personal
    • Personal
    • Personal Home
    • Personal Injury Claims
      • Personal Injury Claims
      • Personal Injury Claims Home
      • Abuse Claims
      • Accidents In Public Places Claims
      • Criminal Injury Compensation Claims
      • Accident At Work Claims
      • Air, Rail & Maritime Claims
      • Asbestos & Mesothelioma Claims
      • Changing Solicitors During a Personal Injury Claim
      • Group Claims
      • Holiday Accidents & Illness Claims
      • Illness Compensation Claims
      • Industrial Disease Claims
      • Injury Types
      • Military Injury Compensation Claims
      • No Win No Fee Personal Injury Claims
      • Personal Injury Claims In Scotland
      • How To Claim Compensation For Personal Injury
      • Product Liability Claims
      • Road Traffic Accident Claims
      • Serious Injury Claims
      • Who Can Help?
      • Support Services
    • Medical Negligence Claims
      • Medical Negligence Claims
      • Medical Negligence Claims Home
      • Cancer Misdiagnosis Claims
      • Birth Injury Claims
      • Cauda Equina Syndrome Claims
      • Never Event Claims
      • Ambulance & Paramedic Medical Negligence Claims
      • Cosmetic Surgery Claims
      • Private Healthcare Claims
      • Cerebral Palsy Claims
      • Defective Medical Device Claims
      • Dental Negligence Claims
      • Diabetes Misdiagnosis Claims
      • Fatal Medical Negligence Claims & Inquests
      • GP Negligence Claims
      • Hospital Negligence Claims
      • What Is Medical Negligence?
      • Meningitis Misdiagnosis Claims
      • Failure To Prevent Suicide Claims
      • Misdiagnosis Claims
      • Ophthalmic Negligence Claims
      • Pregnancy & Gynaecology Injury Claims
      • Sepsis Negligence Claims
      • Pharmacy And Medication Negligence Claims
      • Shrewsbury & Telford Hospital NHS Trust Maternity Care Claims
      • Stroke Misdiagnosis Claims
      • Surgery Compensation Claims
    • Counselling
      • Counselling
      • Counselling Home
      • Counselling Myths Dispelled
    • Family Law
      • Family Law
      • Family Law Home
      • Divorce Solicitors
      • Prenuptial & Postnuptial Agreement Solicitors
      • Child Abduction Solicitors
      • Civil Partnership Solicitors
      • LGBT+ Family Law Solicitors
      • Unmarried Couples' Rights
      • Divorce Financial Settlement Solicitors
      • Child Arrangement Orders
      • Family Mediation
      • Out of Court Divorce Solicitors
      • Separation Agreement Solicitors
      • Adoption & Surrogacy Solicitors
    • Wills, Trusts & Estates
      • Wills, Trusts & Estates
      • Wills, Trusts & Estates Home
      • Estate Planning Solicitors
      • Powers Of Attorney
      • Trusts
      • Will Writing Services
      • Will Disputes & Contentious Probate
    • Conveyancing & Property Solicitors
      • Conveyancing & Property Solicitors
      • Conveyancing & Property Solicitors Home
      • Conveyancing Fees Calculator
      • Buying A Property
      • Selling A Property
      • Remortgage
      • Transfer Of Equity
      • Buy To Let
      • Freehold Purchase (Leasehold Enfranchisement) Solicitors
      • Lease Extension Solicitors
      • Conveyancing Guide
      • Residential Property Disputes
    • Tax
      • Tax
      • Tax Home
      • Business Tax
      • Inheritance Tax
      • International Tax
      • Professional Negligence
      • HMRC Tax Investigations
      • Tax Disputes & Litigation
      • Tax Residence
      • Tax Returns & Compliance
      • UK Resident Non-Doms
      • Wealth Structuring
    • Probate
      • Probate
      • Probate Home
      • International Probate
      • Probate Sale Conveyancing
      • What Is Probate & How Does It Work?
    • Will, Trust & Estate Disputes
      • Will, Trust & Estate Disputes
      • Will, Trust & Estate Disputes Home
      • Trust Disputes
      • Inheritance Act Claims
      • Contesting A Will
      • Contentious Probate
      • Pre-Death Agreements
      • Professional Negligence
      • Challenging A Lifetime Gift
      • Financial Abuse
      • Statutory Will Disputes
      • Defending A Contested Will
    • Employment Solicitors
      • Employment Solicitors
      • Employment Solicitors Home
      • Employment Contract Solicitors
      • Employment Disputes
      • Dismissal & Redundancy Solicitors
      • Employment Discrimination Solicitors
      • Employment Lawyers for Legal Expenses Insurance
      • Harassment & Bullying At Work Solicitors
      • Parental & Family Friendly Employment Rights
      • Professional Discipline Solicitors
      • Recruitment & Promotion
      • Senior Executive Employment Lawyers
      • Settlement Agreements
      • Whistleblowing Solicitors
    • Elderly Legal Services
    • Protecting Your Rights
      • Protecting Your Rights
      • Protecting Your Rights Home
      • Actions Against The Police
      • Inquests
      • Environmental & Planning Law
      • Assessment & Treatment Unit Solicitors
      • Data Protection Breach Claims
      • Education Law
      • Healthcare & Social Services
      • Human Rights
      • Judicial Review
      • Mental Capacity
      • Professional Regulation & Discipline
      • Dispute Resolution
      • Legal Aid
    • Immigration Solicitors
      • Immigration Solicitors
      • Immigration Solicitors Home
      • British Citizenship & Naturalisation Solicitors
      • EU & EEA Immigration Solicitors
      • Indefinite Leave To Remain Solicitors
      • Spouse Visa Solicitors
      • Innovator Visa
      • Permanent Residence Solicitors
      • Business Immigration Solicitors
    • Crime & Investigations
      • Crime & Investigations
      • Crime & Investigations Home
      • Crime
      • Fraud & Financial Crime
      • Court Martial Solicitors
      • Motoring Offences Legal Advice
      • Regulatory Investigations & Enforcement
    • Insolvency
      • Insolvency
      • Insolvency Home
      • Business Restructuring & Insolvency
      • Debt Consultancy
      • Insolvency Disputes & Litigation
    • Court Of Protection
      • Court Of Protection
      • Court Of Protection Home
      • Court Of Protection Deputyship
      • Personal Injury Trusts
      • Court Of Protection Problems & Disputes
      • Healthcare and Social Services
      • Court of Protection Frequently Asked Questions
      • Powers Of Attorney Disputes
      • Statutory Wills Solicitors
  • Wealth Management
    • Wealth Management
    • Wealth Management Home
    • Asset Management For Personal Injury
    • Charity & Philanthropy
    • Estate Planning
    • Ethical & Sustainable Investing
    • Financial Planning
    • Intergenerational Wealth Management
    • Investment Management
    • Retirement Financial Planning
    • Family Offices
    • Succession Planning
    • Tax Planning
  • Business
    • Business
    • Business Home
    • Sectors
      • Sectors
      • Sectors Home
      • Agriculture & Rural Business
      • Retail, Leisure & Hospitality
      • Education
      • Financial & Professional Services
      • Landed Estates
      • Manufacturing
      • Real Estate
      • Sport
      • Technology & Communications
    • Banking & Finance
      • Banking & Finance
      • Banking & Finance Home
      • Corporate Banking
      • Leveraged & Acquisition Finance
      • Real Estate Finance
      • Receivables Finance & Asset Based Lending
    • Environmental, Social & Governance
      • Environmental, Social & Governance
      • Environmental, Social & Governance Home
      • Cyber Security
      • Environment
      • Net Zero
      • Social
      • Diversity & Inclusion
      • Governance
      • International
      • ESG Legal Advisory Services
      • Legislation Library
      • Manufacturing Sector
      • Real Estate
      • Retail, Leisure and Hospitality Sector
      • Sports Sector
    • Business Crime
      • Business Crime
      • Business Crime Home
      • Anti-Bribery & Corruption
      • Asset Tracing & Recovery
      • Cartels & Illegal Price Fixing
      • Cybercrime
      • Dawn Raids
      • Deferred Prosecution Agreements
      • Extradition
      • INTERPOL Red Notices
      • Mutual Legal Assistance
      • Private Prosecution
      • Proceeds Of Crime Act
      • Unexplained Wealth Orders
      • Fraud Lawyers
      • Insider Trading & Market Abuse
      • Corporate Internal Investigations
    • Business Immigration
      • Business Immigration
      • Business Immigration Home
      • Business Visitor Visa
      • Global Business Mobility Visas
      • Innovator Visa
      • Prevention Of Illegal Working
      • Skilled Worker Visas
      • Sole Representative Of An Overseas Business
      • UK Visa Sponsor License
    • Commercial
      • Commercial
      • Commercial Home
      • Commercial Contracts
      • Competition Law
      • GDPR & Data Protection
      • Information Technology
      • Sourcing
      • Notary Public Solicitors
    • Commercial Litigation & Dispute Resolution
      • Commercial Litigation & Dispute Resolution
      • Commercial Litigation & Dispute Resolution Home
      • Banking & Finance Litigation
      • Business Interruption Insurance Lawyers
      • Contract Disputes
      • Defamation & Reputation Management
      • International & Cross-Border Disputes
      • Commercial Debt Recovery
      • Litigation Funding
      • Professional Negligence
    • Corporate
      • Corporate
      • Corporate Home
      • Corporate Advisory
      • Equity Capital Markets
      • Mergers & Acquisitions (M&A)
      • Private Equity
      • Search Funds and Entrepreneurship Through Acquisition Lawyers
    • Costs Team
    • Employment Law
      • Employment Law
      • Employment Law Home
      • Business Immigration
      • Employment Contracts, Policies & Procedures
      • Disciplinary & Grievance
      • Employee & Industrial Relations
      • Employment Lawyers for Legal Expenses Insurance
      • Employment Litigation & Resolution Lawyers
      • Equality, Diversity & Discrimination
      • Flexible Working Arrangements
      • Health & Safety
      • HR Advice Service - IMhrplus
      • Managing Sickness Absence
      • Pensions
      • Recruitment
      • Restrictive Covenants
      • Restructuring & Redundancy
      • Self Employment, Contractors & Agency Workers
      • Employment Seminars, Training & Updates
      • TUPE
    • In-House Counsel
    • Intellectual Property and Media
      • Intellectual Property and Media
      • Intellectual Property and Media Home
      • Defamation & Reputation Management
      • Brand Accelerator
      • Copyright Lawyers
      • Design Rights Lawyers
      • Image Rights Lawyers
      • Online Marketplace Seller Account Or Listing Suspensions
      • Stopping IP Infringement By Sellers On Online Marketplaces
      • Patent Lawyers
      • Trade Mark Lawyers
      • Trade Secrets Lawyers
    • Legal Helpline
    • Licensing
      • Licensing
      • Licensing Home
      • Betting & Gaming Licensing
      • Event Licences
      • Alcohol Licensing
    • Pensions
      • Pensions
      • Pensions Home
      • Employment
      • Managing Death Benefit Trusts
    • Regulatory & Compliance
      • Regulatory & Compliance
      • Regulatory & Compliance Home
      • Road Transport & Operator Compliance
      • GDPR & Data Protection
      • Regulatory Investigations
      • Account Freezing Orders
      • Anti-Money Laundering
      • Companies House Prosecutions
      • Environment & Safety Regulatory Compliance
      • Financial Services Regulation
    • Real Estate
      • Real Estate
      • Real Estate Home
      • Corporate Occupiers
      • Real Estate Development and Regeneration
      • Construction & Engineering
      • Environmental
      • Real Estate Finance
      • Real Estate Investment
      • Later Living & Care
      • Planning
      • Property Litigation & Real Estate Disputes
      • Real Estate Tax
      • Residential Development
      • Strategic Land
      • Structured Real Estate
    • Restructuring & Insolvency
      • Restructuring & Insolvency
      • Restructuring & Insolvency Home
      • Corporate Insolvency
      • Partnership Insolvency
      • Directors' Duties
      • Restructuring Plans
      • Debt Recovery (up to £100,000) – Pricing
      • Restructuring
    • Tax
      • Tax
      • Tax Home
      • Corporate Tax
      • Real Estate Tax
      • Tax Investigations
  • People
    • People
    • People Home
    • Search By Name
    • Search By Location
    • Search By Expertise
    • Business Management
  • Offices
    • Offices
    • Offices Home
    • Birmingham
    • Brighton
    • Bristol
    • Cambridge
    • Cardiff
    • Chichester
    • Edinburgh
    • Gatwick
    • Glasgow
    • Leeds
    • Liverpool
    • London
    • Manchester
    • Middlesbrough
    • Newbury
    • Newcastle
    • North Yorkshire
    • Nottingham
    • Reading
    • Sheffield
    • Southampton
  • Contact
  • About
  • News & Insights
  • Careers
  • International
Irwin Mitchell Logo
Dialog with Irwin Mitchell phone number
Call us on 0808 291 3524

We're here 24/7, 365 days a year.

  • Home
  • News & Insights
  • Newsletters
  • Focus on Housing
  • The Evolution of the Housing Lifecycle

The Evolution of the Housing Lifecycle

More people are renting than ever before. According to a government survey, the private rented sector (PRS) is the second largest tenure in England behind owner-occupation, accounting for 20% of households in 2016/17. With the number of PRS households doubling in size in the decade to 2016/17 (to 4.7 million), this growth is set to continue.

The report by Knight Frank in this magazine lends support to this phenomenon.

It is perhaps of no surprise then, that The Institute of Fiscal Studies has found that the number of home-owning 25 to 34-year-olds fell from 55% in 1997 to 35% in 2017, whilst average property prices in England rose 173% in the same period.

Within the PRS, the build-to-rent sector (BTR) is also on the rise. According to data released by the British Property Federation, between Q4 2017 and Q4 2018 the number of completed BTR homes increased by 29%, the number under construction by 39%, and the number completed, under construction and in planning across the UK increased by 22%.

The biggest BTR market under construction is aimed at young professionals. As it gains momentum, BTR is evolving and diversifying from serving 25 to 34-year-olds to tailor for tenants at all stages of their life. There’s increasing focus on families, with a number of schemes in the pipeline including houses. At one end of the lifecycle is a generation of students used to living in professionally-managed purpose-built accommodation with facilities and amenities. At the other end of the lifecycle is rental accommodation for senior or retirement living.

Planning policy has been one of the major market hurdles for BTR – but the government is catching up.

A blueprint for change

The revised National Planning Policy Framework (NPPF), published in July 2018, encourages residential development to have a mix of tenures, types and sizes to reflect local housing demand.

BTR is now recognised as a distinct asset class. It’s defined in the revised NPPF as typically “100% rented out” purpose-built housing on the same site, professionally managed under single ownership and management control, and offered on longer tenancy agreements.

The revised NPPF also defines affordable housing for rent, expected to be the normal form of affordable housing provision for BTR. It’s known as affordable private rent (APR).

Published in September 2018, specific BTR guidance requires councils, as part of their plan-making process, to undertake a local housing needs assessment. This takes into account different types and tenures. If a need for rental homes is identified, councils should have a policy setting out their approach to promoting and accommodating BTR.

The small print

  • APR homes shouldn’t be distinguishable in size or quality from market rent homes, and they should be distributed throughout a scheme
  • APR, as well as market rent homes, should be managed within a scheme by a single BTR landlord, with no need for a registered provider. The management process includes rent levels, apportionment of homes across the scheme, marketing, and agreements for lettings, management and service
  • Councils must take a reasonable position in negotiating eligibility to occupy APR homes. Names can be suggested from housing lists, but direct nominations are frowned upon
  • Alternatively, a dataset for the scheme can be assembled. Although the final decision over eligibility should be made by the BTR operator, identifying candidates and agreeing on them could be complicated
  • Within any scheme, 20% of properties should be APR homes priced at 80% of the market value (including service charges) for the same or equivalent property. Councils can set a different proportion of APR homes if justified by evidence from the local housing need assessment and the policy set out in the local plan. Guidance on viability (updated in July 2018) also requires councils wanting to set a different APR proportion, or different discount levels, to justify the changes through a viability assessment at the plan making stage
  • Developers are expected to comply with BTR policy requirements. The guidance on viability does allow developers, in exception, to propose alternatives for individual schemes, such as variations to the proportion of APR homes, the depth of discount, and the ability to review rent levels over a scheme’s lifetime
  • The proportion of APR homes provided and the level of discount offered can be varied across a scheme over its lifetime. Any trade-off must be consistent with the overall affordable housing contribution agreed at the outset and an annual statement must be provided to the council to show that the scheme continues to meet it
  • Schemes are expected to remain within the PRS, and the APR homes provided and maintained in perpetuity. The full or partial break-up of a scheme shouldn’t result in the withdrawal or loss of affordable housing. The guidance recommends a clawback arrangement to recoup the capital value of affordable housing provision if APR homes are withdrawn at any time, and there’s a formula for calculating the amount of clawback payable
  • Councils can use covenant periods to retain market rent homes within the PRS, but the guidance doesn’t fix a minimum period. Councils must decide how to structure any clawback arrangement where market rent homes are converted to another tenure before the end of a covenant period.

In practice

The revised NPPF and the BTR guidance show support at national level for BTR. The policy recognition of BTR is welcome and the guidance provides some clarity. So far so good – at least in principle.

However, this is only guidance. Will councils be encouraged to embrace BTR? In practice there’s wiggle room for reluctant councils at local level.

The BTR guidance leaves the scheme-specific details to be negotiated, agreed and set out in a section 106 agreement. Complicated and lengthy negotiations won’t be welcomed by developers working to tight timescales and margins. Placing onerous restrictions on BTR will impede investment and delivery. Schemes must be easy to manage, give stable revenue, long-term rental streams and steady income growth.

Flexibility is essential over the lifetime of a scheme, in limiting development and operational costs, and coping with changing market conditions. Developers may need to break up a scheme, sell individual homes or the whole scheme to owner occupiers or multiple landlords, or convert APR homes to another tenure. In the case of APR homes, a clawback mechanism is proposed. Guidance on market rent homes isn’t clear, and developers and investors will need to take into account the price of not being locked into a covenant period when assessing a scheme’s financial viability. As for lenders, the guidance is silent on whether and how they may be exempted from any covenant or clawback arrangements.

To capture consumers for their full lifecycle, schemes must provide lifestyle, experience, community and brand. Including APR homes will have an impact on a scheme’s financial viability. APR homes, by definition, achieve a lower rental rate than market rent homes, and have the potential to dilute a scheme’s brand, affecting the marketability and price of the market rent homes.

The affordable housing provision is presumed to be APR, but developers may be able to agree other forms of affordable housing or a commuted payment with the council. Paying a commuted sum upfront in lieu of the provision of APR homes on-site may be an attractive option, and one which maintains the status quo. While in theory, the new planning guidance goes towards promoting the necessary changes to effectively meet new housing demand, in practice, success will depend on developers and councils finding mutually agreeable solutions to the PRS conundrum.

For general enquiries

0808 291 3524

Or we can call you back at a time of your choice

Phone lines are open 24/7, 365 days a year


Contact us today

For a free initial consultation

Freephone

0808 291 3524

Prefer not to call?

Use our form

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.

Vanessa Horn
Vanessa Horn Lead Practice Development Lawyer Meet the team

About Irwin Mitchell

Founded in Sheffield in 1912, Irwin Mitchell has always been a bit different. Our advisers really get to know the people and business that we help.

We have offices around the UK so wherever you are, our experts can help.

Contact Us

Give us a ring to speak to a member of our team in the strictest confidence. Or you can fill out our contact form and we'll ring you back.

0370 1500 100

Our phone lines are open 24/7, 365 days a year

Get a call back

Fill in your details below and we'll be in touch as soon as possible

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.

  • Contact
  • 0370 1500 100
  • Contact Irwin Mitchell
  • Social Media
  • Twitter
  • Facebook
  • YouTube
  • LinkedIn
  • Instagram
  • About Irwin Mitchell
  • About Us
  • Responsible Business
  • Careers
  • Business Management
  • Alumni Programme
  • Pay A Bill
  • Complaints Procedure
  • SRA Regulated
  • Terms & Conditions
  • Accessibility
  • Privacy & Security
  • Hoaxes
  • Modern Slavery Act Statement
  • Manage Cookie Settings

© 2025  Irwin Mitchell LLP

Irwin Mitchell LLP is authorised & regulated by the Solicitors Regulation Authority. Our Regulatory Information

Dialog that contains a form to request a callback.

Request A Callback

Enter your details below and a member of our team will contact you within 24 hours

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.