A new report published by GLA Economics and the British Property Federation called for the creation of a brand-driven home rental market, similar to the USA and Germany.

The report outlines how new planning guidance rental-only homes could lower house prices, increase housing investment and deliver new homes from branded rental providers. The aim is to encourage funding to develop a professional rented sector offering branded rented accommodation including decent family homes and long-term tenancies, all professionally managed like an office block.

The professional rented sector would, in essence, be like having Google or Virgin style brands delivering rented housing. ‘Build-to-let’ could potentially create a separate residential market for rental, and works on the premise that, at present, housing is developed solely for ownership.

So while homes may be rented out, their value and that of the land they are on, is determined by how much they would fetch in the ownership market. A planning definition only allowing development for rent would change all this. It would mean such properties would be valued more for their rental income and would thus be as attractive to institutional investors as offices or retail outlets. As well as GLA Economics and the BPF, build-to-let is also backed by Savills, CBRE, Knight Frank and Unite.

Bridget Rosewell, consultant chief economist for GLA Economics, said: “The UK market has become very restricted, limiting access to housing to only a few ways. Encouraging new forms of investment is important to increasing supply and choice in the marketplace. This research helps identify how greater diversity of supply and faster building can be encouraged to meet the needs of London residents.”

Jacqui Daly, director at Savills, who conducted the research, said: “A build-to-let model would allow more operators to grow and become branded providers of rented housing. The build to let product would increase their scale and market dominance, which would have the added advantage of increasing competition between small and large landlords, which would ultimately forcing bad ones out of the sector. It would also increase the supply of long term rented housing and offer a customer focused service to occupiers. As they grow in size, there will be more scope for branded landlords to attract further investment and launch on the stock market.”