Unite initially welcomed the move by British insurer – Legal & General – to build 3000 flats across the UK with the aim of tackling the housing crisis.
The firm has teamed up with Dutch pension company – PGGM – to construct the homes under what’s being termed a £600m ‘build-to-let’ plan.
Legal & General will act as the developer of the properties – ranging from one to four bedrooms – and once built become the landlord.
Targeting yields between 3 and 5 per cent, the rental income raised by the scheme will in turn help to pay pensions.
The initial building stage will see almost 700 properties go up in Bristol, Salford and north-east London.
At present around half of the 250,000 new homes needed every year are being built in this country.
Unite assistant general secretary Steve Turner said, “It’s clear is there is a large and growing housing crisis in this county and we should remember that three thousand homes around the country is a drop in the ocean when we need a quarter of a million new properties each year as things stand and we also need more detail about this scheme – for instance what would be the rent level, and how would that be controlled?
“Certainly we would encourage the private sector to do its bit on providing homes and that’s what Legal & General are doing.
“But what’s really needed, and what Unite, alongside many others, have been calling for, is a large scale government-led investment programme building homes for social rent – providing truly affordable homes and creating decent work,” Turner added.
“Sadly this government seems to me more intent on tearing up the fabric of our communities and deepening the housing crisis than solving it with its pernicious Housing and Planning Bill.”
L&G intends to focus on urban areas with good transport links across the country and on the outskirts of London. Its partnership with PGGM comes nearly a year after the UK insurer made its first investment in private rental housing and set out plans to invest £1bn in the sector.
L&G has also been investing in rented student housing in partnership with universities, and is talking to local authorities about providing affordable housing.
The insurer’s Dutch partner, PGGM, has invested in build-to-rent housing for more than 40 years, pouring close to £3bn into residential projects in the Netherlands and the US.
The UK private rental market has traditionally been dominated by individual buy-to-let landlords, but in the past few years, big institutional investors and developers such as Berkeley Homes have entered the market to build blocks of rental homes.